San Bernardino Tax Attorney and CPA
473 E Carnegie Dr Suite 200, San Bernardino, CA 92408
One of The Best Tax Attorneys in San Bernardino
San Bernardino is a great place to live with excellent services and a vibrant economy. Maintaining a strong tax base is important to provide the services in this area, which means state and federal tax authorities aggressively enforce the tax laws.
Understand that if you have common or uncommon financial and tax situations, you may need the help of a team of local San Bernardino Tax Attorneys, CPAs (certified public accountants) and EAs (Enrolled Agents) to help you work through the legal situation and avoid penalties and collection actions from California tax authorities or the IRS .
In the San Bernardino area, you may need help with tax issues in niche financial areas, such as cryptocurrency investments. Or if you have offshore bank accounts, income generating assets or businesses, you may need advice for planning for international tax situations, such as FATCA compliance and FBAR filing requirements.
Whether you’re concerned about an IRS notification regarding an audit, or you need advice for preparing to file your taxes, schedule a 10-minute call with a local San Bernardino Tax Attorney and CPA. Contact the Tax Law Offices of David W. Klasing for the help you need.
Just east of L.A., San Bernardino is the seat of San Bernardino County. It’s also home to more than 200,000 residents, with strong education, retail, and healthcare industries. San Bernardino’s businesses and residents are required to follow California’s complex tax code, in addition to federal tax laws. These laws are aggressively enforced by state and federal tax authorities like the IRS and Franchise Tax Board (FTB), which can impose harsh penalties for noncompliance. At the Tax Law Office of David W. Klasing, we have more than 20 years of combined experience assisting the San Bernardino region with tax planning, tax audits, criminal charges like tax evasion, international tax regulations like FATCA, and other tax matters. If you have a tax question, look to our San Bernardino tax lawyers for dedicated support.
California, Federal, and International Tax Services in San Bernardino
At the Tax Law Office of David W. Klasing, we are a full-service team of tax attorneys and certified public accountants (CPAs) who combine decades of hands-on experience in civil, criminal, California, federal, and international tax law, including more than a decade of experience in public auditing. Under the leadership of dually certified attorney-CPA David W. Klasing, our nationally-recognized San Bernardino tax firm is committed to providing results-oriented service. Our mission is to restrict your tax debts and penalties to an absolute minimum, help you utilize the tax code advantageously, and work with you to achieve compliance with the law.
From our San Bernardino tax offices, which are conveniently located just off I-10 near the Valley View, South Pointe, and North Central neighborhoods, our personal and business tax attorneys provide award-winning service to C corporations, S corporations, LLCs, partnerships, sole proprietors, U.S. citizens and residents, non-citizens and non-residents, U.S. expats, high net worth individuals, and other taxpayers. Whether you are seeking tax advice on how to pass an inheritance down to your children, have questions for our international tax lawyers about reporting a foreign bank account, need help preparing for a federal or California tax audit, need an aggressive tax defense lawyer to defend you against criminal charges, or want to start exploring your options for tax relief, the Tax Law Office of David W. Klasing offers around-the-clock assistance.
IRS, FTB, CDTFA (BOE), or EDD Audit Defense
Nobody likes the sound of the word audit. When an audit takes place, this means one of the federal or state taxing entities is going to look through all your books and records to ensure that you have been honest on your tax returns. Even if you have been completely honest, you may need assistance gathering and reconstructing the abundance of records they will want to look at. If you have made intentional or unintentional errors, you could face severe fines and penalties. Below we explain the four major organizations that conduct audits in the state of California.
IRS Audit Representation
The IRS conducts all audits related to federal business and personal tax returns. Audits by the IRS can occur for a multitude of reasons, including randomly, but also because of suspected issues with underreporting of income, underpaying of certain taxes, or claiming excessive amounts of tax exemptions or credits you do not qualify for. Typically, an IRS audit will look back at around 3 years of your records but, in some cases, they can go back 6 years or even back to the dawn of time if fraud is discovered.
Types of IRS, FTB, EDD & CDTFA Audits
One of the best indicators for how your upcoming audit will go is the type of audit that the IRS, FTB, EDD or CDTFA elects to use. The federal government & California taxing authorities typically uses three general forms of audit: correspondence audits, office audits, and field audits. The severity and expected time of completion varies for each type of audit, so you should first identify how the government will audit you. Typically, this information is included in the government’s notice letter informing you of the audit.
Certain audit situations are inherently riskier than the more routine audits that most taxpayers are familiar with. If you are being audited and you know for a fact that income is materially understated, deductions are materially overstated or you claimed credits that you were not entitled too, you may be walking straight into an eggshell audit where criminal tax issues are inherently at stake. An eggshell audit is reversed when the auditor knows or suspects that fraud has occurred, but they have not informed the taxpayer or forwarded the audit to criminal investigations for a formal criminal tax investigation. Both types of audits create an elevated risk of a subsequent criminal tax investigation & prosecution.
The least invasive of the three, correspondence audits, are often referred to as “mail audits” because they are conducted without any in-person interaction with an IRS, FTB, EDD or CDTFA agent. This will be initiated by an auditor sending you a notice in the mail that you are under audit and that the IRS requires further documentation to substantiate information on your returns. All contact between you and the auditor will take place through mail or electronically. If you provide the government with what they ask, you should expect a mail audit to conclude within three to six months. Our dual licensed Tax Audit Lawyers and CPAs can help you reconstruct the necessary records and deal with gaps between what you can substantiate and the positions you claimed on your returns.
In an office audit, you will be required to come into a nearby IRS field office with your records and documents for an agent to review. You should also expect the IRS to interview you at your appointment. This is just one reason why you should always hire a dual licensed Tax Audit Lawyer & CPA to help you prepare and accompany you to an office audit. If everything goes as planned, these audits have a similar, short, expected time frame of three to six months.
Finally, a field audit is the most serious type of audit and involves agents coming directly to your home or place of business to look over the records in person and to interview you. Usually reserved for situations where criminal offenses are suspected or targets with complicated revenue & expense streams, field audits may take over a year to resolve, depending on the circumstances. These audits can lead to serious civil or criminal penalties, and you should engage the services of a dual licensed Tax Lawyer & CPA right away to assist you.
Since field audits are so invasive, they create many opportunities for eggshell or reverse eggshell audits to turn into criminal tax investigations if material understatement of tax occurred on the returns being audited. These audits must be closely monitored for potential criminal tax exposure to be identified and mitigated. One approach to such risky audits is carefully answering IRS inquiries to ensure full responsiveness while not providing unnecessary information. Every verbal or written response must be carefully planned and reviewed. This approach is much harder when the taxpayer faces an oral interview, especially if the taxpayer’s employees are interviewed at random with little to know advanced warning. The guidance of our Dual-Licensed Tax Audit Lawyers & CPAs can assist in these challenging situations.
Eggshell audits are challenging because the taxpayer, and possibly their preparer, knows there is a material problem with the tax returns under audit and is delicate because the taxpayer does not want to lead the IRS directly to the issue, but actively obscuring the audit is not a feasible alternative as may constitute a felony in itself. Seeking out the counsel of the Tax Law Offices of David W. Klasing is ideal for addressing this situation.
Our Dual-Licensed Tax Audit Lawyers & CPAs can deal with the IRS on your behalf and help ensure all documents and answers are responsive to the IRS but criminal tax admissions are avoided where possible. Taxpayers must cooperate with IRS representatives during an audit but are not required to provide more information than absolutely necessary. Helping achieve this delicate balance between adequately responding while not revealing excessive information is a value that our Tax Attorneys & CPAs routinely provide.
In an ideal eggshell audit, the IRS will close the audit without a referral for criminal tax prosecution or a civil fraud penalty. Unfortunately, this is not always the case. If intentional misstatements are at issue that led to a substantial tax deficiency, a feasible goal is to resolve those issues in a purely civil audit and avoid criminal tax charges. A Tax Audit Attorney’s skill in persuasion and experience working with the IRS are invaluable while minimizing, where possible, any monetary damage and mitigating any criminal tax exposure.
If the IRS is auditing your taxes and you know there are issues on the selected tax returns, do not wait to seek counsel. Eggshell audits can quickly bloom into criminal tax investigations, especially if the auditor believes the taxpayer is intentionally misrepresenting information or omitting details during the audit. Engaging our Dual-Licensed Tax Lawyers & CPAs can help you respond to the IRS appropriately while limiting your civil additions to tax penalties and interest and mitigating any criminal tax exposure.
Reverse Eggshell Audits
Reverse eggshell audits occur when the IRS suspects tax fraud, knows damaging information and is investigating to confirm that knowledge without the taxpayer being aware. These audits frequently precede a formal criminal tax investigation and must be carefully navigated as they are extremely risky for the unsuspecting taxpayer.
There are many ways the IRS could become aware of incriminating information that indicate that taxable income was fraudulently omitted, deductions were fraudulently overstated, or a credit was fraudulently claimed that the taxpayer was not entitled to. Other state and federal agencies could be investigating the taxpayer and share the information with the IRS. Under and international information sharing agreement, unreported foreign assets or financial accounts may be reported to the U.S. The auditor also may find indications of fraud in a civil audit and continue to investigate while stockpiling criminal evidence to provide to an IRS Special Agent in the criminal investigation division or to a civil technical fraud advisor.
In any of these cases, the reverse eggshell audit must be treated as a very fragile situation. In a civil audit, the taxpayer must cooperate with the IRS and provide what is requested. Unfortunately, sometimes the auditor will request information that could be self-incriminating to the taxpayer. The taxpayer’s fifth amendment right to remain silent can be invoked but doing so will clearly indicate to the auditor that criminal tax evasion probably occurred.
When facing a potential reverse eggshell audit, our dual-licensed Tax Lawyers & CPAs can help in several ways. First, we know how to identify that a reverse eggshell audit is taking place. We have seen many routine audits and can spot when something abnormal is occurring. Second, we can provide counsel on responding to official IRS requests appropriately and advise when to switch to a more defensive posture. Finally, if there is any way to resolve tax deficiency concerns without criminal tax charges, we can negotiate with the IRS representatives to try to minimize the civil assessments of additional tax penalties and interest and mitigate the risk of a lengthy and expensive criminal tax investigation.
Signs that an Audit is Morphing into a Criminal Tax Investigation
Whether you are experiencing an eggshell audit or suspect a reverse eggshell audit, some warning signs may indicate that the audit has taken a turn for the worse. The following are a few occurrences that should cause concern.
- The auditor has disappeared. Once a civil audit uncovers indications of fraud, the audit is closed, and the case is referred for a criminal tax investigation. A criminal tax investigation may be on the horizon if your IRS agent has suddenly and inexplicably stopped sending document requests and cannot be reached.
- Alternatively, if the auditor expands the scope of your audit to additional tax years or involves additional auditors, they may be laying the groundwork for a criminal tax referral.
- The IRS agent starts asking you or your employees why certain tax decisions were made. Questions about intent signify that the auditor is determining whether an issue was intentional or caused by negligence.
- Actions that imply the auditor is preparing evidence to be passed on to another investigator are cause for concern. These include increasing the number of copies of documents requested or recording audit interviews.
These are only several red flags that might indicate a criminal tax investigation is underway or imminent. Our Dual-Licensed Tax Lawyers & CPAs are familiar with a wide variety of audit actions and can spot when something abnormal is occurring.
California Employment Development Department (EDD) Audit Representation
While the IRS handles issues related to the federal payroll tax, California payroll tax issues are handled by an audit from the California Employment Development Department (EDD). Employers are required to withhold state payroll taxes out of their employees’ checks and hold them in trust until it is time to remit them to the state. If you avoid collecting such taxes or collect them from employees without sending them to the state, you could face serious civil and or criminal tax penalties.
Perhaps the most common issue in EDD audits relates to classifying those who work for you as either an employee or an independent contractor. While you are required to collect payroll taxes from employees, you are not required to do so for independent contractors. The rules regarding who can be designated as an independent contractor are complex. A skilled Tax Lawyer can fight to show that you classified properly and that any improper classifications were made unintentionally.
California Department of Tax and Fee Administration (CDTFA) Audit Representation
Sales taxes are the purview of the California Department of Tax and Fee Administration (CDTFA). CDTFA audits relate to potential underpaying of sales taxes or the failure to collect such taxes in the first place. These audits can be triggered randomly, especially in certain industries where cash payments are common, and sales taxes are often not charged properly. They can be extremely intrusive, asking to look at the records of every sale you made and comparisons are also made to your federal and California income tax returns.
It is important to engage a Tax Attorney as early as possible to ensure everything is conducted properly and to help you in the reconstruction of your books and records related to sales. If the CDTFA issues a finding that you owe back taxes, a tax attorney will have 30 days to file a protest to challenge it or you will be deemed to owe what they say you owe. This can be devastating for businesses if the amount is higher than what they can pay but retaining a skilled Tax Attorney can help prevent this from occurring.
How Do You Choose a dual licensed Tax Attorney & CPA in San Bernardino?
Taxpayers experience issues in a number of different ways. Someone might be looking for tax law help when they have concerns about past or future filings, the possibility of facing an audit, or impending civil or criminal tax charges. In many cases, concerned taxpayers have more than one of these issues on their mind. Whether or not they know about the underlying issues, they could find themselves facing a litany of consequences in no time.
To defend yourself against the most serious of potential civil and criminal tax law consequences, you will want legal counsel with experience and knowledge in 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. Not every law firm has in-house services of Certified Public Accountants (CPAs). By using an interdisciplinary approach to tax representation, dual-licensed Tax Attorneys and CPAs provide a better perspective on creative tax solutions that can benefit clients.
This is why the dual-licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing are uniquely qualified to assist clients in all areas regarding state and federal tax law. Our dual-licensed Tax Attorneys and CPAs have a unique skill set that allows us to provide a variety of services you might otherwise need to seek from two or even three different sources. By using our services, you make us your one-stop shop for all of your tax needs, streamlining your case and centralizing your tax defense strategy.
You will also want a tax lawyer who is local to you, even if you are dealing with federal tax issues. San Bernardino residents can benefit from visiting their tax lawyer’s offices for an in-person discussion out of our Irvine office. Additionally, if you are called in for an IRS, FTB, EDD or CDTFA office or field audit, your local dual licensed Tax Attorney & CPAs can accompany to your appointment and make sure that you are treated fairly and equitably along the way. The Tax Law Offices of David W. Klasing have locations throughout the State of California, including San Bernardino, and can provide you with the tax law services that your case deserves.
Why You Should Hire a San Bernardino Dual Certified Tax Attorney and CPA
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In addition to the broader services described above, such as our tax planning and tax audit services in San Bernardino, we also possess the expertise to assist with niche tax issues in developing areas of the law. For example, numerous clients have sought our assistance with cryptocurrency tax matters, such as IRS Bitcoin reporting requirements. We have also established ourselves as leading authorities in the area of international taxation, such as FATCA compliance and the FBAR filing requirement for taxpayers with offshore bank accounts
From estate planning to innocent spouse relief – business formation to IRS criminal investigations – streamlined disclosure to tax preparation for individuals and corporations – the Tax Law Office of David W. Klasing approaches every matter with enthusiasm, precision, and meticulous attention to detail. To arrange a reduced-rate consultation regarding a personal or corporate tax issue, contact the Tax Law Office of David W. Klasing online, or call our San Bernardino tax office at (909) 991-7557 today.