Awards & Recognition
Receiving an audit notice is never a pleasant experience. Not only must the taxpayer contend with the stress of the tax audit itself – in addition, he or she is likely to suffer financial consequences. These consequences may take the form of unexpected tax assessments, imposition of civil penalties, or even the prospect of a criminal investigation / prosecution– and in some cases, all three.
The good news is that taxpayers have the right to dispute the results of state and federal tax audits, which opens a process described as “appeals.” Moreover, taxpayers have a right to dispute the results of appeal by going to court and litigating the case until resolution is achieved.
San Jose, CA Tax Audit and Appeals Lawyers for Businesses and Individuals
As taxpayers often learn the hard way, tax audits come in many shapes and sizes, from federal income tax audits conducted by mail to state payroll tax audits conducted in person. Over the past 20 years, the versatile appeals and litigation team at the Tax Law Office of David W. Klasing has successfully represented numerous individuals and businesses in state and federal tax audit appeals. Types of tax audits we help taxpayers dispute the results of include, but are not limited to, the following:
- Business and corporate tax audits
- CDTFA audits (California Department of Tax and Fee Administration)
- Cryptocurrency- and Bitcoin-related tax audits
- Divorce-related tax audits
- EDD audits (Employment Development Department)
- FICA/payroll and employment tax audits
- Foreign account and FBAR audits (Foreign Bank Account Reporting)
- FTB audits (Franchise Tax Board)
- IRS audits (Internal Revenue Service)
- Correspondence audits
- Eggshell and reverse eggshell audits
- Field audits
- Office audits
- Sales and use tax audits
- State and federal income tax audits
- Worker classification audits
Whether we are filing a protest with the IRS Office of Appeals, sending an opening brief to the California Office of Tax Appeals (OTA), presenting a case before an appeals officer, or working to negotiate a favorable compromise, we will vigorously pursue the course of action that is most likely to yield a positive outcome for the taxpayer. In addition to managing your case, our role is protecting your rights – and mitigating your losses in the process.
Disputing (Appealing) the Results of an IRS, FTB, EDD, or CDTFA Audit
Taxpayers are not necessarily bound to the initial results of a tax audit. Since auditors, like any person, are capable of erring, state and federal laws create processes by which taxpayers may challenge audit findings. Depending on whether the appeal is successful, the taxpayer may thus avoid or correct the improper assessment of taxes, interest, and/or penalties.
There are strict procedures for audit appeals, regardless of whether such appeal will be heard by the Office of Appeals or OTA. If the controversy concerns a federal tax issue, such as alleged nonpayment of federal income taxes, the taxpayer should file a written document known as a “protest letter,” which will be forwarded to the Office of Appeals for review only if properly prepared and thoroughly supported by evidence, such as facts and/or laws supporting the taxpayer’s position. If the controversy pertains to a California tax issue, the taxpayer should submit an “opening brief,” which is similar to a protest letter, to the OTA.
Note that IRS protest letters should be directed not to the Office of Appeals itself, which will merely delay proceedings, but to the address on the letter explaining your right to appeal. It is also important to emphasize that the OTA – a new appeals body which was formed through the Taxpayer Transparency and Fairness Act of 2017 – now performs various functions once administered by the Board of Equalization (BOE). If you are unfamiliar with the recent changes to California’s tax appeals system, it is imperative that you communicate with an attorney before initiating a protest, as many of the rules have been altered dramatically.
Tax Controversy and Litigation
Each year, IRS Appeals succeeds in settling about 100,000 tax disputes. Nonetheless, there are certain disputes which prove too complex or too vast in scope for Appeals to resolve – particularly in cases where the taxpayer owes large tax debts, is accused of committing fraud, or has a dispute concerning corporate taxes.
If you are unhappy with the results of your appeal, it may become necessary to elevate your case to U.S. Tax Court, where the matter can be settled through litigation. However, you must act swiftly to file a case in Tax Court. You have only 90 days from the date on which you received Letter 531 – also called the “Notice of Deficiency” or your “90-day letter” – to petition U.S. Tax Court. If you were overseas on the date of receipt, the 90-day deadline expands to 150 days.
San Jose Tax Law Offices
If you, your spouse, or your business intends to fight the results of a state or federal tax audit, arm yourself with experienced tax representation first. At the Tax Law Office of David W. Klasing, our strategically assembled team of San Jose tax attorneys have more than 20 years of combined experience handling audit appeals and litigation in both California and federal matters. In addition, Mr. Klasing has over a decade of experience conducting tax audits, giving our tax firm deeper insight into the appeals process, taxpayer rights, and the enforcement of rules and standards for auditors.
Whether the situation calls for negotiation – or aggressive litigation in U.S. Tax Court – our deft attorneys will tailor our strategy to protect your best interests. For a reduced-rate consultation concerning an audit, appeal, litigation or other tax controversy in San Jose, contact us online, or call (408) 643-0573 or (800) 681-1295 today.
