Oxnard, CA IRS Tax Audit Attorney
Facing an IRS audit can be a significant burden that takes time out of your professional and personal life and can be extremely stressful. Simply because your faced with an IRS audit is not an automatic determination that you did something wrong, but the IRS often treats the subject of an audit with suspicion and mistrust. Having an IRS Tax Audit Attorney at your side during an IRS audit can benefit you greatly. A Tax Attorney will place him or herself between you and the IRS, and where appropriate, they will argue that the tax positions you took that are currently under audit were justified, and attempt to dissuade the IRS from expanding the scope of the audit into other areas of the return or additional tax years. Where large errors are found on your audited returns, he or she will attempt to cast those errors in a light of negligence rather than willful intent, where the latter could result in a civil fraud penalty at best or prosecution for tax crimes at worst.
If you live in the Oxnard area, our Experienced Tax Attorneys are ready, willing and able to help. The Tax Law Offices of David W. Klasing employs highly educated Tax Attorneys, CPAs, and EAs, that have years of experience of doing damage control in audits to protect your liberty and net worth. For a reduced-rate initial consultation regarding your audit, call our Tax Law Office today at 800-681-1295 or reach out to us online. Our Oxnard office is conveniently located in the Riverpark area, just off US 101 and Oxnard Boulevard.
Why am I Facing a Tax Audit?
An IRS audit is an examination of a person (or person’s) – or a business’s – tax and other financial records. The goal of an audit is to determine whether or not the individual’s or company’s taxes were properly filed, and whether the right amount of income tax was paid.
An IRS audit is an examination of a person (or person’s) – or a business’s – tax and other financial records. The goal of an audit is to determine whether or not the individual’s or company’s taxes were properly filed, and whether the right amount of income tax was paid To select individual taxpayer and businesses to audit, the IRS typically utilizes two general methodologies. First, the IRS statistically analyzes related groups of business tax returns sorted by the North American Industry Classification System utilizing a closely guarded computer algorithm to generate a differential scoring. This algorithm statistically looks for potential errors by finding discrepancies in items of tax return income, deductions and credits that statistically deviate too far from what the algorithm considers “normal” based on the pool of tax returns it is statistically analyzing. For example, if you had exceptionally high deductions or credits, the algorithm would add to the differential score it gives the return each tax return line item that it find’s statistically suspicious. The worst score a tax return can be given is a 999, then a 998, 997 etc.… The worse the differential score a return gets the higher the likelihood it will be audited.
Alternatively, if the IRS choses to audit a business, partner, shareholder, investor, or someone else heavily related to your business or to you individually from a tax perspective, they may choose to audit you as well, because of that relationship. The rationale for this is that the IRS is concerned that related business stakeholders could be part of a group effort to commit tax fraud or other civil tax violations. Moreover, investigating or auditing third parties related to an identified tax crime or serious underpayment can help recoup the associated tax loss.
What if I Disagree with the Results of My Tax Audit?
Depending on the situation, you may have a basis to dispute, or “appeal,” the results of your IRS tax audit. However, before you begin the IRS tax audit appeals process, you should discuss your options with an experienced Oxnard Tax Audit and Appeals Attorney, who can advise you of your rights and responsibilities, represent you before the IRS, and walk you through each step of the often-convoluted appeals process.
The first stage of this process is to either draft an effective “protest letter” or tax court petition setting forth your legal disagreement with the IRS, the differences in either the law or facts that are the basis for your disagreement, and the relevant facts and laws to support your argument. Note that, if the amount in dispute is $25,000 or less, you may file a Small Case Request rather than appealing the audit. Your Tax Audit and Appeals Attorney in Oxnard can help you determine and pursue the appropriate course of action.
How do I Avoid Penalties for a Tax Audit in California?
Because of the secretive and highly sophisticated statistical IRS audit selection process, it is very rare that you face an IRS tax audit where you did absolutely nothing wrong. An IRS audit ordinarily results, to some extent, in your deductions and tax credits found to be overstated, or that your income was understated (the latter is much more serious). While this does not automatically result in a finding that you have been involved in some sort of conspiracy to defraud the United States, all it takes is a $5,000 understatement of tax liability to face a 20% negligence penalty. One potential way to possibly avoid this automatic penalty is to argue that you reasonably relied on a tax professional where taking the original tax position. If the IRS Revenue Agent suspect that you committed tax fraud, they could also attempt to assess a 75% civil fraud penalty, and or, refer the case for potential criminal tax investigation and subsequent prosecution.
In order to achieve the most optimal outcome in your audit, (i.e. the lowest additional assessment of tax, penalties and interest and a purely civil tax, as opposed to a criminal tax, disposition of your case) you should consider hiring the Tax Law Offices of David W. Klasing. Our Tax Attorneys, CPA and EAs can help protect your liberty and your net worth from baseless accusations by the IRS where they get either the facts or the law wrong in your audit which is a very common occurrence in our experience.
If the IRS does find issues with your original personal or business returns, our Tax Lawyers, CPAs and EAs will endeavor to minimize the tax, penalties and interest and other negative effects resulting out of your audit. If the IRS is unwilling to agree to a mutually acceptable audit outcome, our firm will appeal the IRS’s attempted assessment and prove to the government in the appeals process where it has gotten either the law or the fact wrong.
Our Tax Professionals are highly experienced in the IRS appeals process including fast track mediation, negotiating with the IRS appeals department, and in negotiating with IRS Chief Counsel’s Office to achieve a mutually agreeable settlement where litigating against the IRS before the U.S. Tax Court. We are very adept at proving that the IRS’s flawed audit findings were based on an either an incorrect interpretation of the Tax Code or other primarily authority, or were flawed based on an incorrect interpretation of the client’s facts. Ultimately, the protection that a Tax Attorney can offer is far superior than that of a CPA, EA or C.T.E.C. certified preparer, especially where there is a need to protect confidential communications through the Attorney Client Privilege where tax fraud may be an issue.
Oxnard IRS Audit Lawyers
The Oxnard Tax Law Attorneys, CPA and EAs at The Tax Law Offices of David W. Klasing are ready, willing and able to defend and protect you during your IRS audit and where necessary, any subsequent appeal, litigation or collection action. If the IRS has contacted you about an audit, your first call should be to an Experienced Tax Audit Lawyer. Contact our tax law offices today at 805-617-4566 or 800-681-1295 or reach out to us online to schedule a reduced rate initial consultation at our Oxnard office, or another of our convenient locations across Southern California.