Salt Lake City Tax Audit Attorney and CPA

Awards & Recognition

Tax Law Offices of David W. Klasing

David W. Klasing, serving Salt Lake City, is a dual licensed Tax Attorney and a Certified Public Accountant specializing in Taxation, Estate Planning, and Business Law. With an “A” rating from the Better Business Bureau and a perfect 10.0 AVVO rating, he brings a wealth of knowledge and expertise to your city. His nearly 30 years of professional tax, accounting, and business consulting experience makes him a reliable resource for Salt Lake City civil and criminal tax defense representation, planning, and compliance services.

David W. Klasing’s qualifications extend beyond his impressive professional experience. He holds a bachelor’s degree in business administration, with an emphasis in accounting, a master’s degree in Taxation, and a Juris Doctor. His education and deep understanding of Taxation and legal matters allow him to offer specialized services in the estate, trust, and accounting areas to Salt Lake City residents.

His professional involvement includes prestigious roles such as chairing the California State Bar Association, Tax Procedure and Litigation Committee, and the Orange County Bar Association Taxation Section. He is also a member of esteemed organizations such as the American Bar Association Tax Section, the California Society of Certified Public Accountants State Committee on Taxation, and is a past member of the American Association of Attorney Certified Public Accountants.

With our brand-new Salt Lake City Satellite office, we understand the complexities and potential anxieties of dealing with the IRS. As your trusted partner in Salt Lake City, we promise to stand with you every step of the way, offering the highest level of expertise and service to navigate IRS audits successfully. Choose us, and you’re choosing among the best firms to assist with potential tax issues in Salt Lake City. Call us at 800-681-1295 or fill out our contact form today.

Navigating Through an IRS Audit: Understanding and Asserting Your Rights

An IRS audit might seem daunting, but it’s essentially a thorough examination of an individual’s or an organization’s financial records. The IRS conducts these audits to verify that your reported income, expenses, and credits align with the tax laws and you’ve paid the right amount of tax.

Often, many taxpayers find themselves selected for an audit without understanding why. An audit can be conducted through mail or via in-person interviews. These interviews could take place at an IRS office, your home, your place of business, or the office of your legal or tax representatives. The audit scope may vary greatly – from a few queries about aspects of your tax return to a comprehensive review of your financial affairs over multiple tax years.

We highlight the legal stipulations under the IRS Restructuring and Reform Act of 1998 to empower you during this process, particularly Section 3503. This law accentuates that each taxpayer has the right to understand the reasons for their selection for an audit. The IRS must provide clear and detailed explanations about their audit process, the parts of your financial records under examination, and the potential inconsistencies they’ve identified.

Armed with nearly 30 years of experience, our dual-licensed Attorneys and CPAs are here to ensure that you’re informed about these rights and capable of asserting them. As a former auditor in public accounting, Mr. Klasing’s understanding of the audit process allows him to help you preempt tax issues before they escalate and fiercely protect your interests during audits, criminal tax investigations, or tax litigation.

With our team, you can navigate the audit process with confidence and transparency. Let us help you make this daunting experience manageable, ensuring your rights are always protected and your tax positions are accurately and zealously represented.

The Anatomy of an IRS Audit: Reasons and Triggers

An IRS audit can seem daunting, but understanding its triggers and reasons can alleviate some of this apprehension. The IRS employs systematic processes to select taxpayers for audits, ensuring a fair and comprehensive approach.

Certain taxpayer groups may be more susceptible to IRS audits due to their income bracket, business type, or financial behavior. High-income earners, small business owners, and individuals with significant financial fluctuations typically fall into these high-risk groups.

Key to the IRS’s audit selection process is the Discriminant Function System (DIF). The DIF is a scoring system that rates tax returns based on their “audit potential.” Higher DIF scores may indicate discrepancies that warrant a closer look, potentially leading to an audit.

The IRS also uses the Unreported Income Function (UIF) to detect potentially underreported income. It matches the information on tax returns to data reported by employers, banks, and other third parties. Certain anomalies, like reporting no income or failing to file taxes, can attract the IRS’s attention and trigger further investigation.

Beyond these factors, the IRS also pays attention to specific circumstances:

• Large Cash Transactions and Cash Businesses: Depositing substantial sums of money into bank accounts or operating mainly cash-based businesses can be seen as an attempt to evade electronic income traces, potentially increasing your audit chances;
• Offshore Accounts and Foreign Assets: Owning these isn’t inherently wrong, but accurately disclosing them can lead to penalties;

• Income Level: High-income earners, particularly those making over $500,000 annually, are more frequently audited. This risk can be even higher if you attempt to offset a significant portion of your taxable income through deductions;

• Depositing Large Sums of Money: Regular deposits of at least $10,000 into your account can trigger an audit, especially if you cannot reasonably explain these large cash transactions. Trying to circumvent this by making deposits under the reporting threshold can also raise suspicions and is a felony called structuring.

• Self-Employed Workers: Self-employed individuals who run Schedule C businesses often attract the attention of the IRS. This is particularly the case when they claim deductions that don’t align with their income and business activities, such as deducting for a vehicle used for personal and business purposes;

• Foreign Financial Accounts: US citizens are taxed on worldwide income, including income from foreign sources. If you own or have authority over foreign financial accounts and fail to report any income earned offshore, this could result in an audit. This is especially the case if the combined value of these foreign financial accounts exceeds $10,000.

• Operating a Business with Disproportional Income and Expenses: If your business’s reported expenses do not proportionally match your income, it could trigger a tax audit and potentially a criminal tax investigation.

In Salt Lake City, like anywhere else, understanding these audit triggers is crucial. At the Tax Law Offices of David W Klasing, we guide our clients to navigate these complexities, align their financial practices with IRS guidelines, and minimize the chances of triggering an audit.

IRS Decision-Making and Audit Notices

Navigating the IRS audit process requires a clear understanding of the IRS’s decision-making mechanisms and how they communicate with taxpayers through audit notices.

The IRS follows a rigorous and multi-tiered selection process to decide which tax returns to audit. The Discriminant Information Function (DIF) score is central to this system, which compares your tax returns to similar ones. If your return deviates significantly from the norm, it could be flagged for further scrutiny.

Furthermore, specific factors such as your business type, income level, and any recent substantial changes in your financial situation are also considered. For instance, residents of Salt Lake City who own a small business, have a high income or have made significant financial shifts recently could be at higher risk of being audited.

In addition to these targeted audits, the IRS conducts random audits as part of its National Research Program (NRP). While less common, they can occur without specific red flags on your tax returns.

If the IRS selects your return for an audit, you’ll receive a mail notice detailing the items being reviewed and the necessary documents you must provide. Upon receipt, it’s critical to understand the content of the notice and promptly respond.

When you receive an audit notice, contacting dual-licensed Attorneys and CPAs like us at the Tax Law Offices of David W. Klasing is prudent. Our brand-new office in Salt Lake City, combined with nearly 30 years of tax, accounting, and business consulting experience, enables us to provide comprehensive audit representation tailored to the unique challenges that Salt Lake City residents and businesses face.

Note: It’s crucial to respond promptly to the audit notice. Ignoring it will not make it disappear and can lead to additional penalties. You can navigate this process effectively and efficiently with the Tax Law Offices of David W Klasing, aiming to minimize any potential tax liability.

Why You Should Choose The Tax Law Offices of David W. Klasing During an Audit

Understanding intricate IRS tax codes, rules, and regulations may feel overwhelming. This is where professional support from experienced tax attorneys and CPAs becomes crucial—the Tax Law Offices of David W. Klasing, led by David W. Klasing Esq. CPA M.S.-Tax, offers comprehensive tax representation, planning, and compliance services.

Comprehending the stress and anxiety an IRS audit can bring, our firm introduces a new, client-focused 4-hour consultation at any of his satellite offices. Clients can hire David W Klasing for four hours at any of his satellite offices, including Salt Lake City, without incurring any travel expenses. This service epitomizes our commitment to making tax matters as stress-free as possible.

As a Cirrus SR22 instrument-rated private pilot, David extends his unmatched expertise to Salt Lake City, traveling in his efficient private plane. We stand out in the crowd, bringing the dual advantage of legal and tax services under one roof – all for one price. To avail of our half-day scheduling option and benefit from our expert guidance, minimizing potential tax liability, reach us at 800-681-1295 or fill out our contact form.

At The Tax Law Offices of David W. Klasing, we pride ourselves on providing a robust defense during audits, criminal tax investigations, and tax litigation. In a nation with over a million attorneys and half a million CPAs, David Klasing is part of an exclusive group of approximately 3,000 professionals who carry both designations and have earned a Master’s in Taxation. Navigate your tax challenges with our unique blend of proficiency, commitment, and affordability.

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