One of the Best Tax Attorney in Panorama City

The Federal and State (CA) Tax Attorneys at The Tax Law Offices of David W. Klasing represent taxpayers in Panorama City and throughout Los Angeles, Los Angeles County and the San Fernando Valley on a variety of tax law needs. Our Tax Lawyers, CPAs and EAs are ready willing and able to represent you if you are facing a Federal or California Tax Audit or criminal tax investigation. The firm has extensive experience with the following California taxing authorities: California Department of Tax and Fee Administration “CDTFA” and its sister agency, Office of Appeals “OAT”, together formerly known as the “BOE”, Franchise Tax Board “FTB” Employment Development Department “EDD”. We will provide you invaluable assistance with understanding how the veritable sea of Tax, Estate and Gift & Business laws apply to your specific facts and circumstances and how to build and pass on wealth within the bounds of federal and state (CA) law.

For a reduced-rate consultation on your Tax, Estate and Business law needs, contact our Los Angeles Tax Lawyers today. The Tax Attorneys, CPAs and EAs at The Tax Law Offices of David W. Klasing may be able to take your case, fight the IRS on your behalf, and work to keep you clear of criminal and civil tax violations if you need to play defense. We can work with you to reduce your income tax and estate taxes and run your business more profitably when it’s time to play offense.

International Taxation Lawyers

The International Tax Attorneys, CPAs and EAs at The Tax Law Offices of David W. Klasing work hard to help businesses and individuals with issues regarding international and off-shore businesses, accounts, holdings and investments. Under foreign laws, these accounts, businesses and investments face foreign taxation. Our core focus is the U.S. Federal and California tax and information requirements and the illumination or minimization of double taxation where income is simultaneously taxed in the U.S. and offshore.

If you have foreign investments, businesses or accounts, our International Tax Attorneys, CPAs and EAs will help you to understand and comply with the myriad of federal income tax and information reporting requirements in order to avoid potentially net worth threatening civil and criminal penalties and to legally minimize worldwide income taxes. If you are already, or may soon become, in serious trouble with the IRS or CA, our International Tax Attorneys may be able to fight the government’s claims, help clear your name and improve your financial situation. Alternatively, if we can get out in front of your federal or California, domestic or offshore income tax or foreign reporting problems we can utilize a full blown Offshore Voluntary Disclosure (OVDP) or streamlined offshore, or domestic, voluntary disclosure to foreclose the risks of a future Federal or CA criminal tax prosecution and to minimize the potential civil penalties and interest that could apply.

Since foreign bank and investment accounts are not subject to the same mandatory 1099 taxable income reporting on items like dividends, interest and capital gains, that U.S. banks and investment firms are, the burden of reporting on foreign bank and investment account balances and investment income falls to the U.S. account holder. If you have foreign accounts, or you have signature authority over such accounts, you may be required to file periodic disclosure documents with the federal government. The most familiar of these documents to the average U.S. Taxpayer and the average tax advisor is the “FBAR,” or Report of Foreign Bank and Financial Accounts. This document tells the U.S. government most of what it needs to know about your foreign account balances under U.S. law. However, the Foreign Account Tax Compliance Act (FATCA) may impose additional disclosure requirements depending on your individual facts and circumstances. IRS forms like Form 8938 may be a required part of your income tax filings to inform the IRS of potential offshore sources of investment income and investment balances. Failing to file required foreign information or reporting offshore sources of taxable income will assuredly set-up a taxpayer for serious civil and criminal tax complications / exposure.

Failure to File and Tax Evasion in California

The Federal and California Tax Code requires every U.S. taxpayer to file taxes every year (with certain exceptions). Willful failure to file, or intentional attempts to evade Federal or California Tax can result in Federal or State (CA) criminal tax charges.

Simply forgetting to file or filing your tax returns late, for a single tax year, will not ordinarily result in Federal or California criminal tax charges. However, both the Federal Government and the State of California can criminally prosecute a taxpayer where a multiyear pattern of non-filing exists. For California purposes, a pattern of non-filing, where taxable income has gone unreported, is in and of itself criminally prosecutable as a felony and is the most commonly prosecuted tax crime in the state. For Federal purposes, each year of non-filing is a misdemeanor punishable by up to one year in jail for each count, (i.e. 5 years of non-filing equals up to 5 years in jail) and may be ramped up to a felony where the pattern of non-filing is accompanied by actions that the IRS views as attempts to conceal the fact that you are not filing your returns as required or that are likely to mislead the government as to your requirement to file taxes in the first place, as Spies Evasion. If you fail to timely file your income taxes, the IRS may eventually create a “substitute for return” (SFR) and the state of California may issue a proposed assessment, based on the sources of income that are reported to them via form’s 1099 and W2 for example and then begin collection action for any deficiency. These assessments typically do not include the credits or deductions you would otherwise be entitled to, even where the Fed and CA knows of them, which ordinarily resulting in a higher tax burden than you would have incurred had you voluntarily filed, along with additional penalties and interest. However, intentional, willful actions aimed at cheating the IRS or the state of California out of taxes is a much more serious matter and is consequently much likelier to result in criminal tax charges. Lastly, late filed returns do not qualify for tax relief in bankruptcy.

If you think you may be charged with a tax crime, or committed serious tax errors you need to correct, talk to a Non-Filer Tax Attorney today. Our Los Angeles tax attorneys can help you deal with IRS agents, file amendments, and straighten out potential tax troubles before you are charged with a crime. In many cases, this kind of proactive representation may be able to avoid criminal tax charges before a criminal tax investigation or criminal tax indictment ever occurs.

Panorama City Audit Defense Lawyers

One of the most beneficial services our firm offers is strategic and aggressive tax audit defense. If you are being audited, or believe that you may be audited, our lawyers can help handle the IRS’ audit process, form agreements with the IRS, and challenge improper IRS decisions. Even if the audit against you is unfounded, the audit process can be long, intrusive, and stressful. Our lawyers stand between our clients and the IRS, helping explain our clients’ tax situations, arguing against IRS sanctions and changes to your tax burden, and appealing inappropriate decisions against you.

How to Appeal the Results of an IRS Tax Audit

Unfortunately, you may find yourself in disagreement with the IRS’ findings at the conclusion of your tax audit. However, you are not necessarily required to accept the initial determination. Depending on your reason or reasons for disagreeing with the audit’s outcome, you may be able to challenge the IRS via the tax audit appeals or litigation process.

To do so, you will be required to prepare a written “protest letter,” or tax court petition which must establish how and why you disagree with the audit’s outcome, while further including any laws and facts which support your argument. Your protest letter must be submitted to the address on the letter explaining your rights to appeal – not to the Office of Appeals itself, which may result in delays or processing issues.

Due to the complicated requirements of the IRS audit appeals process, it is not advisable to handle the matter yourself. Being represented by a skilled and effective Tax Appeals & Litigation Attorney in Panorama City will increase your odds of appealing successfully.

IRS Audit Representation

The IRS is the federal agency tasked with conducting audits on federal income tax returns. These can be your personal tax returns or tax returns related to your business. The IRS sometimes conducts audits completely randomly, but many times audits will be triggered by suspected underreporting of income or overreporting deductions or credits on your return. The typical amount of time the IRS can look back on your records is usually 3 years, but in certain cases they will be allowed to look back 6 years or even more. The audits should be taken seriously because if the IRS discovers any willfully false reporting, civil, and criminal tax penalties may be assessed.

Types of IRS Audits

There are several versions of audits the federal government could choose to conduct. Correspondence audits, office audits, and field audits all differ by how they are conducted and the level of detail that the IRS digs into. Eggshell audits and reverse eggshell audits are not formal audit types but terms of art used to describe specific situations that create exceptional risk or criminal investigation and prosecution in an audit. Identifying which type of audit you are facing will be important because each varies in terms of severity, thoroughness, and expected time frame for resolution. Your Panorama City tax lawyer can identify which type of audit you are dealing with and help you prepare so the issue is resolved as quickly and painlessly as possible.

Correspondence Audit

A correspondence audit, sometimes referred to as a mail audit, is the simplest and least invasive type of audit. For a correspondence audit, an IRS agent will send you a letter asking for certain documents to back up the positions taken on your tax returns. The entire audit will be conducted remotely, with contact between you and your Panorama City tax attorney and the auditor. The process occurs entirely through the mail, over the phone, or by email. Typically, from the time of your first response to the correspondence audit request, you can expect a resolution in your case in three to six months. Our Tax Lawyers and CPAs can help you prepare the necessary documents and work to quickly correct any mistakes you made on your returns.

Office Audit

If you are faced with an office audit, you will be required to bring the requested records and documents to the closest available IRS field office for the agents to review. Additionally, you will be subjected to an in-person interview. You should always be accompanied to this meeting by your Panorama City tax attorney to ensure that you are being treated fairly. If everything goes as planned, office audits typically lead to a decision that comes between three to six months after the date of your office visit.

Field Audit

A field audit is the most serious type of audit and is often reserved for cases where the IRS is considering severe civil or criminal tax penalties, the discrepancy between the taxes reported and the taxable income suspected is substantial, or where complex revenue streams and multiple business entities complicate the financials of the situation. You should contact a Panorama City tax lawyer right away if you find out that the government plans to institute a field audit against you. In the course of a field audit, IRS agents will want to come into your personal residence, place of business, or both, so that they can look through your records themselves. Resolution of a field audit may not come for several months or even years following the date of the visit.

In addition to viewing financial records at your home or place of business, the IRS may interview you or your employees. When an IRS representative interviews the employees of a business, they can gain access to an excessive amounts of potentially incriminating information. Our dual-licensed Tax Attorneys and CPAs can work with businesses to prepare employees for the questions they will be asked and can guide them on how to answer most affectively. It is important that employees fully respond to IRS questions while not providing more information than necessary. If an auditor has any follow-up questions, they can ask them – additional information should not be volunteered. Eager employees may want to help resolve the audit and try to clear up any perceived misunderstandings, but they could give more information than necessary. This risk of excessive information is one of the reasons why a field audit requires careful preparation with the help of an attorney.

Eggshell Audit

An eggshell audit occurs when taxpayers know of a substantial compliance issues with their tax returns that could be indicative of tax fraud, but the IRS is not. Compliance concerns often amplify after the IRS provides an audit notice and the taxpayer is preparing documentation in response to an Information Document Request (IDR). In the course of reviewing the requested documents, the taxpayer realizes that there are material misstatements. Overstated deductions, understated income and claiming credits a taxpayer is not entitled to are the most common types of misstatements that can create criminal tax exposure. Alternatively, the taxpayer may know they took risks with unclear or aggressive tax planning and preparation decisions. Either way, there is information that the taxpayer does not want the IRS representative to find, and if found, does not want the IRS to draw inferences that tax fraud has occurred with the returns under audit, especially if a pattern of similar misstatements exists in the historical client tax compliance pattern.

Moving forward with an eggshell audit using the original preparer as a representative may be tempting while simply trying to avoid disclosure or discovery of the known compliance problems. However, intentional deception bears a higher risk than artfully admitting a mistake and taking steps to remedy it. When an IRS agent conducts an audit, it is ordinarily only a civil audit. However, if the auditor discovers what to them looks to be intentional fraud, they may be required to refer your case for a criminal tax investigation. If they IRS Criminal Investigation division takes up your case, they have a 90% conviction ratio. However, if the compliance issues can be artfully addressed by our dual licensed Tax Attorneys and CPAs within the civil audit, you will have to pay any tax deficiencies and associated penalties, but you will avoid criminal charges.

If you receive an audit notice and realize that it will be an eggshell audit, hiring our dual-licensed Tax Attorneys and CPAs would be prudent, regardless of the severity of the tax issue. Audits can take a turn for the worse very quickly. An attorney can review any IRS requests and responses, interface with the IRS on your behalf, and be present for any audit interviews. Most importantly, an attorney can watch for warning signs that the audit could become a criminal tax investigation. In such a case, the attorney can work with the taxpayer to remedy the issue and persuade the auditor that the issues can be resolved at the civil level.

The best method to address an eggshell audit is to prevent it in the first place. Taxpayers can reduce the risk of tax return misstatements or omissions by securing competent tax preparation services and asking for a second opinion if necessary. If you run a complex business, have foreign assets, or have other circumstances that complicate your taxes, requesting the assistance of dual-licensed Tax Attorneys and CPAs can provide legal advice for thorny tax issues.

Reverse Eggshell Audit

Reverse eggshell audits are perhaps the most dangerous types of audits. In such cases, the IRS knows or suspects tax fraud, but the taxpayer is unaware of these suspicions. The IRS representative may continue with a civil audit while collecting evidence of fraud that is later handed over for a criminal tax investigation.

These types of audits are tricky to address. On the one hand, taxpayers must comply with IRS requests and provide any requested information. On the other hand, the taxpayer does not want to provide any self-incriminating evidence. In a criminal tax investigation, taxpayers can freely invoke their right to remain silent. However, in a civil audit, this stance would alert the auditor that there most likely are criminal tax issues in the tax returns under audit.

Since such audits are a delicate balance of responding appropriately without providing too much information, our dual-licensed Tax Attorneys and CPAs are invaluable throughout the audit process. Even if you do not suspect a reverse eggshell audit, an attorney can monitor the audit for any subtle warning signs that indications of fraud have been discovered. Confirming the existence of a reverse eggshell audit as early as possible allows the taxpayer to take a more defensive stance.

There are some blatant signs that a civil audit has turned into a criminal tax investigation. For example, a civil auditor is required to stop their audit when fraud has been discovered. At that point, the auditor may suddenly stop requesting documents or interviews and become suddenly and mysteriously unreachable. Any unexplained halting of a civil audit should be great cause for concern since it may indicate that the IRS is initiating a criminal tax investigation.

More subtle warning signs also occur when the IRS representative only suspects tax fraud. If the auditor believes that they may need to refer the case for criminal tax investigation, eventually, they may begin asking for excessive copies of business documents or start recording audit interviews. These seemingly routine actions may be indications that the auditor is preparing a case file for hand off to the IRS Criminal Investigation Division. Additionally, the focus of audit requests may shift from asking for backup documents or calculations to requesting explanations and inquiring as to why certain decisions were made. Questions that focus on the intent behind tax decisions imply that the auditor suspects tax fraud and wants to determine if it was intentional fraud or mere negligence.

The secretive nature of a reverse eggshell audits is one of its most challenging aspects of dealing with them. A taxpayer cannot defend against a clandestine criminal tax investigation that they are not aware is occurring. Ensuring that your audit occurs under the watchful eye of dual-licensed Tax Attorneys and CPAs can help reduce any surprises and ensure you have a strategic plan to manage potential audit risks.

California Franchise Tax Board (FTB) Audit Representation

In addition to a federal tax return, most citizens of California must file a California income tax return. Audits related to California income tax returns are conducted by the California Franchise Tax Board (FTB). Many times these “audits” will simply piggy-back off audits conducted by the IRS related to your federal returns. The results of these audits will be sent to the FTB and, even if you did not owe money to the federal government, you may still owe money to the state.

The FTB also conducts independent audits related to California-specific tax issues. Such audits should not be treated less seriously than IRS audits just because they are being done by the state. A tax lawyer can help mitigate the damage of underreporting or false reporting and limit potential fallout. If you are found to owe back taxes, a lawyer can negotiate with the FTB to work out a reasonable payment plan and keep you from paying further fines.

California Employment Development Department (EDD) Audit Representation

The California Employment Development Department (EDD) conducts audits related to issues with employment taxes paid by businesses, specifically the state payroll tax. Each business is required to collect payroll taxes from their employees and hold these funds in trust until it is time to remit them to the state. If your business fails to collect or fails to properly remit state payroll taxes, you could face serious penalties from the EDD.

One of the most common issues in an EDD audit is the classification of workers as independent contractors vs. employees. Employers are not required to collect payroll taxes from independent contractors like they are with employees. However, the state has tight and complex restrictions on who can be classified as an independent contractor and looks very poorly on those who try to avoid taxes by misclassifying. A tax lawyer can help you understand who can and cannot be classified as an independent contractor and work to resolve any issues stemming from misclassification by showing that it was unintentional.

California Department of Tax and Fee Administration (CDTFA) Audit Representation

The California Department of Tax and Fee Administration (CDTFA) conducts audits related to state sales tax issues. The state sales tax can be tricky as it can vary sometimes depending on what locality your business is in, what kind of product you are selling, and where the person buying it is located. Certain industries like bars and restaurants where sales tax issues are more common are often subjected to random audits by the CDTFA, or the audit might be triggered by suspicious activity on your returns that makes them think you are failing to charge or to remit proper sales taxes.

These can be some of the most invasive audits as they will often require you to produce documents related to all of your sales, including receipts and ledgers. A skilled tax attorney can help you reconstruct the necessary records and work to prevent serious civil or criminal penalties from being imposed if it is found that you failed to properly remit sales tax revenue to the state.

How Do You Choose a Tax Lawyer in Panorama City & the San Fernando Valley?

The state and federal tax codes can cause a number of concerns. If you are seeking tax law help, you may have questions about issues that affect your past or upcoming filings, the possibility of an impending audit, or the likelihood of potential civil or criminal tax charges. You may have more than one of these issues in mind, but even if you do not, you may quickly realize that your single tax issue could present a litany of problems.

You deserve legal counsel with experience and knowledge in the realm of tax law. But not just any tax lawyer will do. You would be best served by a legal service that can help you in every aspect of your tax situation. The Tax Law Offices of David W. Klasing have experienced tax law minds that are also Certified Public Accountants (CPAs). By using knowledge from the two disciplines simultaneously, dual-licensed tax attorneys and CPAs bring a circumspect approach to client services that can serve multiple benefits.

Therefore the dual-licensed Panama City tax lawyers and CPAs at the Tax Law Offices of David W. Klasing are uniquely qualified to provide you with seasoned counsel in every area that you might have concerns. Seeking our help eliminates the possibility that you might otherwise need to seek assistance from two or even three different sources. This has the added benefit of streamlining your case and centralizing your tax defense strategy.

You will also want services that are local, regardless of whether your tax issues are state or federal. Panorama City & San Fernando Valley residents can benefit from a productive case assessment. If you are facing an IRS field or office audit, it will be much easier for a local tax lawyer to accompany you to ensure that you are treated fairly throughout the trying ordeal. The Tax Law Offices of David W. Klasing have locations throughout the State of California, and we are ready and able to give your case the care and attention that it deserves.