Santa Barbara Dual-Licensed Tax Litigation & Appeals Attorney & CPA
On October 11th, 2022, The United States Attorney's Office for the Central District of California issued the following update:
Santa Barbara Man Sentenced to Over 11 Years in Federal Prison for $14 Million Ponzi Scheme, Tax Evasion, Identity Theft, and Other Felonies
Darrell Arnold Aviss was a resident of Santa Barbara who defrauded investors of more than $14 million through a Ponzi scheme. Aviss also failed to report the income he received from the scheme on his tax returns, resulting in significant tax evasion charges. Aviss was eventually caught and pleaded guilty to several charges, including wire fraud, mail fraud, and tax evasion. He was sentenced to over 11 years in federal prison and ordered to pay restitution to his victims.
The case quickly gained media attention, shocking the public and raising awareness about the severe consequences of tax evasion. This multi-million-dollar tax case is a potent reminder of tax litigation's potential risks and penalties. It highlights the need for skilled, dual licensed Tax Litigation Attorneys and CPAs who can navigate the complexities of tax law and accounting principles and protect you in tax courts.
The Internal Revenue Service (IRS) is the federal agency that enforces U.S. tax laws. At the same time, the California Franchise Tax Board (FTB) administers state personal income tax and corporate tax regulations in Santa Barbara. The Employment Development Department (EDD) oversees payroll taxes, unemployment insurance, and disability insurance within the state. The California Department of Tax and Fee Administration (CDTFA) administers sales, use, and other tax programs. Together, these agencies ensure tax compliance and investigate potential tax fraud or evasion at both the federal and California state levels, working in tandem to maintain the tax system's integrity. Tax disputes are usually litigated in the following courts:
- The United States Tax Court;
- United States Bankruptcy Court for the Central District of California;
- California Superior Court, Santa Barbara County;
- California Court of Appeal, Second Appellate District, Division Six; and
- California Supreme Court.
At the Law Offices of David W. Klasing, we provide comprehensive tax litigation services to clients in Santa Barbara. With over 20 years of experience and a unique combination of legal and accounting expertise, our dual-licensed Tax Litigation Attorneys and CPAs are equipped to handle all types of tax disputes with the above-mentioned tax courts and agencies. David W. Klasing is among an estimated 3,000 professionals in the country who has earned a law degree, is a licensed CPA, and has earned a master's in taxation, making him a highly qualified dual licensed attorney with specialized knowledge in the fields of tax law & accounting.
Additionally, David has held esteemed positions such as Past Chair of the OCBA Tax Committee, Past Chair of the California Bar Tax Procedure and Litigation Committee, and Past Education Chair of the American Society of Attorney CPAs. Among approximately 24,000 professionals in the country having earned both a law degree and a CPA license, David W. Klasing is uniquely positioned to provide clients with comprehensive tax litigation services.
The Complextities of Tax Litigation Process
Tax litigation is a legal process through which tax disputes are presented, reviewed, and resolved in the appropriate venue. These disputes may stem from various tax-related issues, such as civil and criminal tax matters, audits, administrative appeals, and international tax issues. Given the complexity of tax law, consulting an experienced dual-licensed Tax Litigation Attorney and CPA can help you address potential disputes and comprehend your position before entering a tax audit.
Criminal Tax Litigation: Criminal tax issues arise when a taxpayer is suspected of committing tax crimes at both federal and state level, such as tax evasion, filing fraudulent tax returns, concealing foreign assets, state income tax fraud, or failing to remit sales and use taxes. The criminal tax litigation process involves a thorough investigation by the IRS or relevant state tax agencies, such as the California Franchise Tax Board (FTB), the California Department of Tax and Fee Administration (CDTFA), or the Employment Development Department (EDD), followed by potential criminal charges and subsequent court proceedings.
During the investigation, federal and state tax agents meticulously analyze the taxpayer's financial records and tax returns to uncover evidence of illicit activities. They may employ advanced data analytics and forensic accounting techniques to identify patterns indicative of fraud or tax evasion. Agents may also conduct witness interviews, collaborate with other law enforcement agencies, and gather additional evidence to strengthen their cases.
If the IRS or state tax agency uncovers compelling evidence of criminal activity, they may refer the case to the Department of Justice (DOJ) or the California Attorney General's Office for prosecution. Taxpayers charged with a criminal tax offense face significant penalties, including substantial fines, restitution, and imprisonment. Penalties may vary based on the nature of the offense and the jurisdiction in which the crime was committed.
Civil Tax Litigation: Civil tax issues can result from various tax-related matters, such as audits, administrative appeals, and state and local taxes. The civil tax litigation process consists of multiple stages, including appeals, tax court, and district court, where taxpayers can challenge tax authorities’ proposed changes to their tax returns or assessments.
Upon completing an examination, if any proposed changes exist, the IRS agent sends the taxpayer an examination report detailing the adjustments and a letter notifying them of their right to appeal within 30 days. An appeal typically involves a conference with an IRS Appeals Officer and filing a formal written protest, stating the taxpayer's disagreements with the proposed changes and their reasoning.
If the taxpayer does not respond to the 30-day letter or fails to reach an agreement with the IRS Appeals Office, they generally receive a notice of deficiency. This notice provides a 90-day window to petition the U.S. Tax Court. Failure to respond to the 90-day letter will result in assessing the amount specified in the notice of deficiency, even if the proposed changes were erroneous.
As a team of experienced dual-licensed Tax Litigation and Appeals Attorneys and Certified Public Accountants (CPAs) with a sattelite office in Santa Barbara that we vigourously service by air, we offer comprehensive support and guidance throughout civil and criminal tax litigation processes at federal and California state levels. Our in-depth understanding of tax law, coupled with our expertise in accounting, allows us to effectively navigate the complexities of tax disputes, audits, appeals, and court proceedings. We are committed to helping clients understand their rights, respond to information requests, negotiate settlements, and present persuasive legal arguments in court. Our objective is to minimize potential liabilities and expertly steer through the intricacies of the legal system to achieve the most favorable outcome for your case. Trust our seasoned professionals to be your steadfast allies in navigating the challenges of tax litigation.
Navigating Diverse Tax Disputes with Santa Barbara Dual-Licensed Tax Litigation Attorneys and CPAs
Tax disputes in Santa Barbara can manifest in various forms, reflecting the intricacies of federal and state tax systems. From audits to international taxation matters, taxpayers may confront numerous challenges that necessitate a profound understanding of tax laws, regulations, and procedures. In this section, we delve into some of the most prevalent types of tax disputes that individuals and businesses face in Santa Barbara, elucidating the complexities of each scenario and emphasizing the significance of informed representation and guidance in these matters.
Audits: During an audit, the IRS or state tax agencies scrutinize taxpayers' financial records to ascertain their compliance with tax laws. Taxpayers involved in audits may be liable for additional taxes, interest, and penalties. As Santa Barbara tax attorneys, we possess extensive experience representing clients during audits. We can aid them in responding to information requests, clarifying intricate tax matters to auditors, and negotiating potential settlements. We aim to help clients minimize tax liabilities and avert costly legal repercussions.
Administrative Appeals: Should a taxpayer contest an audit determination or other tax decision made by the IRS or state tax agencies, they can seek an administrative appeal. These appeals allow taxpayers to challenge tax assessments or other choices without resorting to court. As Santa Barbara tax attorneys, we offer guidance and representation during administrative appeals, presenting arguments on behalf of our clients and advocating for a favorable resolution.
Tax Court and District Court Litigation: Tax disputes may advance to tax Court or district court when audits or administrative appeals prove unsuccessful. Tax Court specializes in tax controversies, while district courts handle a more comprehensive range of legal issues, including tax disputes. Tax controversies refer to disagreements or disputes between taxpayers and tax authorities regarding the interpretation and application of tax laws, regulations, or policies. As experienced dual-licensed Tax Litigation & Appeals Attorneys and CPAs, we are equipped to represent clients during court proceedings related to tax controversies and disputes. We use our expertise in tax law and procedures to defend our clients' rights and interests and strive to achieve the most favorable outcome for their case.
State and Local Taxes: Disputes surrounding state and local taxes can arise from levies imposed by the State of California or local government entities. As Santa Barbara tax attorneys well-versed in California tax laws and local ordinances, we can offer invaluable guidance and support to taxpayers confronting state and local tax disputes. We assist clients in navigating various administrative appeals processes, negotiating with tax agencies, and potentially litigating in state courts to safeguard their rights.
Penalty and Interest Issues: Penalties and interest can substantially escalate the expenses associated with tax disputes, imposing additional financial strain on taxpayers. We can help taxpayers tackle penalty and interest concerns, potentially pursuing penalty abatement or reduction of interest charges and negotiating with tax authorities to minimize supplementary costs.
Collection Due Process (CDP) Disputes: CDP disputes entail challenges to collection actions undertaken by tax authorities, such as the IRS or the California Franchise Tax Board. As experienced dual-licensed Tax Litigation & Appeals Attorneys and CPAs, we can provide informed representation during CDP hearings, advocating for our client's rights and suggesting alternative payment arrangements to settle the dispute.
Partnership Taxation: Partnerships can give rise to intricate tax situations and potential disputes between partners and tax authorities. We possess extensive expertise in partnership taxation. We can assist in resolving issues pertaining to the distribution of income and deductions among partners, fundamental calculations, and the treatment of partnership transactions.
International Taxation:International tax disputes in Santa Barbara necessitate a profound understanding of complex tax laws and regulations governing cross-border transactions. As Santa Barbara tax attorneys, we hold significant experience in international tax disputes and can provide valuable guidance to ensure compliance with international tax laws and regulations. We can assist in addressing inquiries from foreign tax authorities, negotiating settlements, and representing clients in litigation. Our proficiency in international tax laws allows us to deliver comprehensive solutions for managing our clients' cross-border tax concerns, safeguarding their interests, and reducing their exposure to international tax liabilities.
Partner with Us to Protect Your Business and Finances
At the Law Office of David W. Klasing, we recognize the stress and intricacies associated with tax litigation. We firmly believe that every taxpayer deserves equitable treatment and representation when confronted with an IRS dispute. Should you disagree with the IRS's imposed results, do not concede—stand up for your rights alongside us.
If the IRS has misinterpreted the law or facts of your case, filing a tax court petition can pave the way for a more favorable outcome. Boasting a 90% success rate in reducing tax penalties and interest, our team consistently surpasses litigation costs by a significant margin. We are committed to securing justice for you by demonstrating that the law and facts support your position.
Our seasoned Santa Barbara dual liscensed Tax Attorneys and CPAs have helped innumerable clients achieve justice without ever entering the tax court, thus sparing them the most costly aspect of litigation. We can assist you in navigating the legal system and safeguarding your rights and interests. With a 98% settlement rate, the IRS often prefers not to litigate as do you. Leveraging our honest approach and expertise, we strive to attain a just outcome through appeals and litigation.
As an ethical team of Santa Barbara dual-licensed Tax Litigation & Appeals Attorneys and CPAs, we prioritize your needs over our own. If we believe your case cannot be improved through litigation or at federal or state taxing authority internal appeals level, we will not accept your case. Our primary objective is ensuring fair treatment by federal and California taxing authorities, not prioritizing our own financial interests. With our team by your side, you can have confidence in receiving the support and guidance necessary to navigate tax litigation and secure a just outcome. For a reduced-rate initial consultation, contact our office today at 805-200-4053 and 800-681-1295 or contact us online. Our appointment only, non-staffed, Santa Barbara saltellite office is located in Downtown Santa Barbara just off State Street:
7 W Figueroa St Suite 300, Santa Barbara, CA 93101
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More Commonly Asked Tax Audit Questions
- How should Tax Audits be Handled by Criminal Tax Counsel?
- How to survive audit when I cheated on return being audited
- What is an eggshell audit?
- What is a reverse egg shell audit?
- Why is a reverse egg shell audit dangerous for a taxpayer?
- Warning signs of a criminal referral from an IRS audit
- Effective tax defense counsels goals in an egg shell audit?
- How are the 4 goals and outcomes 1 and 2 best obtained?
- What are the possible outcomes of an egg shell audit?
- Is it my right to know why I was selected for examination?
- What can I do to prepare for an audit?
- What is an IRS civil examination?
- How IRS decides which tax returns are audited
- What are my appeal options if I disagree with IRS?
- What are my basic taxpayer rights if the IRS audits me?
- Options if I am unable to pay at the conclusion of audit
- What a 30 or 90-Day Letter from the IRS means
- What is involved with appealing disagreements?
- Rights to disagree with IRStaxauditor’sss findings
- Can I stop the IRS from repeatedly auditing me?
- Can I have the examination transferred to another area?
- Can I record my IRS interview and is it a good idea?
- How many years of returns are at risk during an audit?
- Common reasons for the IRS to conduct a tax audit
- How to avoid negative consequences from an IRS interview
- Have to agree to interview by taxing authority directly?
- Are all audits the same?
- What should I do if the IRS is investigating me?
- What ifIdon’ttt respond to a taxing authority audit notice
- Your rights during an IRS tax audit
- Risks of attending an IRS audit without a tax lawyer
- Most common audit technique used by taxing authorities
- Don’t go into an IRS audit without representation
- Why hire an attorney to represent me in an audit?
- Why hire David W. Klasing to represent me in an audit
California Sales Tax Questions and Answers
- Common issues encountered during sales tax audit
- What is a sales tax audit?
- Disagreeing with business audit conclusions
- Timeline to file Petition for Redetermination?
- What should Petition for Redetermination contain?
- Is the appeals conference formal or informal?
- Appeals Division’s Decision and Recommendation
- Are a mark-up percentage and a profit margin the same?
- Problems with the mark up audit
- Can State Board of Equalization ignore my business records
- What is a sales tax deficiency determination?
- Business being audited for sales tax. Should I be worried?
- Audit determined fraud to avoid sales and use tax
- Definition of “sale” for California Sales Tax
- What do California sellers need to know about sales tax?
- How do I apply for a sellers permit?
- What are my obligations as a permit holder?
- What is sales tax?
- What is tangible personal property?
- What is a sale?
- What are total gross receipts?
- What is use tax?
- Who is responsible for paying the use tax?
- Who is a retailer engaged in business in California?
- Who is a qualified purchaser?
- Do I need a Certificate of Registration Use tax?
- Do I need a Use Tax Direct Payment Permit?
- What types of sales are exempt from sales tax?
- How are Internet Transactions Taxed?
- How is California sales or use tax determined?
- What is the statewide sales and use tax rate?
- Are there other local and district sales and use taxes?
- Total sales and use tax rate calculation
- How to protect against successor liability in California
- Recourse when issued California sales tax liability notice
- CA Sales Tax liability extend to purchasers/successors?
- Waiting Until Audited to Take Action on Tax Matters
- Sales tax records needed in California
- What are California’s sales and use taxes?
- Why does the State of California audit businesses to ensure compliance with sales and use taxes?
- How does the State determine whether to audit my business?
- The BOE reviews the purchase invoices of my business
Questions and Answers for Criminal Tax Representation
- When tax defense counsel parallels tax crime investigation
- Guilty of tax obstruction by backdating documents?
- To be found guilty of tax obstruction must a person actually be successful in impeding the IRS’s functions?
- Help! The Document I Gave the IRS Had False Information
- Tax crime aiding or assisting false return IRC §7206(2)
- What is the crime known as tax obstruction § 7212?
- What is the difference between tax perjury and tax evasion?
- What is the tax crime commonly known as tax perjury?
- What is a Klein Conspiracy?
- Increased possibility of civil action in IRS investigation
- Am I Guilty of Tax Evasion if the Law is Vague?
- What happens if the IRS thinks I committed tax crimes?
- What are ways to defend against a tax evasion charge?
- Difference between criminal tax evasion and civil tax fraud
- What accounting method does the IRS use for tax fraud
- Can I Change Accounting Method to the Accrual Method
- What is the willfulness requirement for tax evasion?
- I didn’t know I committed tax fraud. Can I get off?
- Concealed assets from IRS. Can I avoid tax evasion charges
- How government proves I willfully engaged in tax evasion
- What is the venue or court where a tax crime case is heard?
- Must the IRS prove tax crimes beyond a reasonable doubt?
- Is it a crime to make false statements to the IRS?
- Will the IRS overlook my tax evasion if it’s minor?
- Failed to tell IRS about my nominee account
- Audit risk with cash based business transactions
- How to defend a client charged with tax evasion
- Is it tax evasion if I didn’t file income tax return?
- Government says I attempted to evade my taxes. Now what?
- I forgot to pay my taxes or estimated tax. Is this a crime?
- Government proof I “willfully” failed to pay taxes
- 5 Ways to Respond to Tax Evasion Charges
- Being audited after using a tax professional
- Rules for what an IRS agent can do while investigating me
- How tax preparers, attorneys and accountants are punished
- How the IRS selects tax crime lead for investigation
- How does the IRS prosecute suspected tax crimes?
- Does IRS reward informant leads for suspected tax crimes?
- How the government proves deficiency in a tax evasion case
- Do prior tax crimes factor into new IRS tax convictions?
- Requesting conference before investigative report is done
- Requesting conference after IRS Special Agent Report
- What are my rights during an IRS criminal investigation?
- Avoid prosecution for tax crime with voluntary disclosure?
- Defense tactics that make it hard for to prove willfulness
- How a tax attorney can stop your criminal tax case?
- What can you generally tell me about tax crimes?
- Continuing filing requirement with investigation pending
- Federal criminal code crimes that apply to tax issues
- Penalty for making, subscribing, and filing a false return
- CID special agent’s report for criminal prosecution
- What is the discovery process in a criminal tax case?
- What the IRS includes in indictment for tax case
- What is the hardest element of a tax crime to prove?
- IRS methods of gathering evidence to prove tax crime
- What does a grand jury do in IRS tax crime prosecution?
- Failure to keep records or supply information
- Failure to make a return, supply information, or pay tax
- What is attempting to evade payment of taxes?
- What is income tax evasion and how is it punished?
- What is attempted income tax evasion?
- What is the crime of failure to pay tax? What is punishment
- Crime of making or subscribing false return or document
- Criminal Investigation Division investigation tactics
- Tax crimes related to employment tax forms and trust funds
- Tactics to defend or mitigate IRS criminal tax charges
- How the IRS generates leads about suspected tax crimes
- What is the crime” evasion of assessment” of tax?
- Specific examples of “attempting” to evade tax assessment
- What is the so-called Spies evasion doctrine?
- Does overstating deductions constitute tax evasion?
- Is it tax evasion if my W-4 contains false statements?
- IRC §7201 attempt to evade vs. common-law crime of attempt
- What are the penalties for Spies tax evasion?
- How government proves a taxpayer attempted tax fraud
- What is a tax that was “due and owing.”
- What is evasion of assessment for tax liability?
- Is evasion of assessment different from evasion of payment
- Does the IRS have a dollar threshold for tax fraud?
- What is the IRS burden of proof for tax fraud convictions?
- Are Tax Laws Constitutional?
- What is the source of law that defines tax evasion?
- Does section 7201 create two distinct criminal offenses?
- Does tax evasion definition include partnership LLC
- What if I helped someone else evade taxes?
- Is it illegal to overstate deductions on my tax return?
- Is it illegal to conceal bank accounts from the IRS?
- Do later losses justify prior deductions?
- Common reasons the IRS and DOJ start investigations
- What is the Mens Rea component of tax crimes?
- What is a proffer agreement and what are the risks?
- Why to have an attorney to review a proffer agreement
- Why enter into a proffer agreement?
- Limited use immunity from proffer agreements
- Difference between civil and criminal fraud allegation
Questions About Delinquent Payroll Taxes and Trust Fund Recovery Penalty
- What happens if an employer continues to incur new payroll tax liabilities?
- California Employment Taxes Basics
- How Does the IRS Develop an Employment Tax Fraud Case from the First Indication of Fraud to a Criminal Indictment?
- Can more than one person be considered responsible by IRS
- How unpaid employment tax payments are allocated
- When a corporate officer is considered a responsible party
- Examples of trust fund recovery penalty determinations
- Failing to pay employment taxes after notice is given
- How to determine responsible person for trust fund recovery
- Assessing trust fund recovery penalty and option to appeal
- What is the trust fund recovery penalty?
- What are the penalties for failure to pay employment taxes
- When am I considered liable for company’s employment taxes