Awards & Recognition
The Tax Attorneys, CPAs and EAs at The Tax Law Offices of David W. Klasing are ready willing and able to take your case and fight the IRS on your behalf. From convincing the IRS your originally filed tax returns are correct and amply supported by your books and records, to fighting the IRS and appealing their decisions where they have got either the facts or the law wrong, our Tax Law Attorneys, CPAs and EAs can help.
While the vast majority of IRS audits are civil in nature, the IRS is known to occasionally use income, employment, estate and excise tax audits to clandestinely criminally investigate taxpayers for tax crimes. The auditor may be working with the Criminal Investigation Division of the IRS lurking in the background, to search for the common telltale signs that are indicative of tax fraud, called badges of fraud, in a taxpayer’s tax records and filings. The IRS’s goal in doing so is to detect, enforce against and prosecute tax crimes in order to create a general deterrence against tax evasion by publicizing any criminal tax conviction. Even in a standard civil audit, the IRS will get into your financial records and previous tax filings in order to scrutinize the tax filing decisions you made, and will fight to prove you made errors when and if they detect them. When they uncover problems with your tax filings, at a minimum, they will attempt to assess additional tax, penalties, and interest. The worst-case scenario where the auditor determines that tax fraud occurred is a referral of the audit over to the Criminal Investigation Division of the IRS for potential criminal investigation followed by prosecution by the Income Tax Division of the U.S. Attorney’s Office. If you are undergoing an audit or criminal tax investigation in Ventura County, talk to an IRS Tax Audit / Criminal Investigation Defense Lawyer today, especially where you know for a fact, you fudged the numbers on the returns under audit or investigation, or where you suspect an eggshell audit or reverse eggshell audit may be at issue.
For a reduced-rate consultation on your case, contact our Ventura County Tax Attorneys at 800-681-1295 or reach out to us online today. Our Ventura County tax law office is located in Oxnard, just off Oxnard Boulevard and US 101.
Why am I Being Audited?
The burning question most people have when they first learn they are facing an audit is, “Why me?” The IRS opens tax audits for various reasons. The first thing to understand is that an audit is not necessarily some sort of automatic punishment for your previous tax filing behavior. Audits are examinations, and while the government does not typically open an examination when no noncompliance is suspected, the IRS on occasion may do just that in a random selection fashion when they open a national research program audit.
Ordinarily the IRS opens an audit for two main reasons. The first common reason for an audit may be because your taxes elicited a series of “red flags.” The IRS uses computerized statistical algorithms to compare your taxes to the average “norm” of similarly filed tax returns. (i.e. If you’re a dentist, your return will be statistically compared to the tax returns of similarly situated dentists) The algorithm, or differential scoring system, looks at your total tax burden in comparison to the total taxable income reported, how much you claimed in various categories of deductions and tax credits, and looks for any red flags (large variances) from the statistical averages it calculates for each of these return categories. In addition, the IRS’ algorithms are most likely designed to flag certain types of deductions as a whole, like a home office deduction where it sees rent expense being claimed on a schedule C. It will also flag your tax return if your deductions were very high or your amount of tax paid was very low in comparison to the total income you reported. In reality, your deductions may be perfectly legal and supportable, but the IRS may not be able to determine that until they audit your position on a return that the algorithm indicates most likely contains large or multiple misstatements or multiple red flags.
The other reason the IRS typically audits a taxpayer or a business is because they are associated with someone else who is under audit or criminal investigation (i.e. the Preparer or a related Partner, Shareholder, or LLC Member is being audited or criminally investigated). If the IRS discovers serious underpayment, misrepresentations, or tax evasion during an audit or criminal tax investigation of a Tax Preparer, Shareholder, Partner or LLC Member, the IRS will routinely suspect a high likelihood that that wrongdoer may have involved related third parties in their criminal tax activity or civil tax noncompliance. The IRS will routinely audit or investigate related third parties to determine if they are involved in the scheme they detected or just to recapture any identified tax noncompliance at the entity level they know flows through to the related individual taxpayers.
While an audit does not immediately mean you probably did something wrong and is most likely just a garden variety civil examination, there is a remote chance of a clandestine criminal tax investigation, which could end with the IRS identifying civil or criminal tax noncompliance. Regardless, for the reasons cited above, you should not face the IRS without an Experienced Tax Audit Attorney at your side and possibly their team of staff Kovel CPAs and EAs in the background.
Fighting the IRS During a Tax Audit
The IRS may seem like they are your enemy during a tax audit, but that is not always automatically the case. An experienced Audit Defense Attorney understands that every audit is not indicative of a client’s underlying civil or criminal tax noncompliance. Most audits are simply a civil examination to confirm if a taxpayer’s individual and business tax returns were filed correctly. That the amounts of income, deductions and credits were calculated and reported properly. A good Tax Attorney can satisfy the IRS’s inquiry with the presentation of proper substantiation (evidence) and appropriate supporting tax law to sustain a compliant taxpayer’s reported income, claimed deductions and tax credits, and provide the necessary proof that their clients originally filed individual and business tax returns were proper under the U.S. Tax Code. It thus it is theoretically possible that an audit can end peacefully, without the assessment of additional tax penalties and interest.
To save you expense in complying with an audit, many times, after the IRS first rightfully identifies noncompliance in an income tax audit, they may be willing to accept an agreement to amend the remaining tax returns open to the audit statute that they have not audited yet, to allow a taxpayer to voluntarily correct the mistakes identified by the IRS, rather than incurring the additional representation expense if the IRS was to formally audit them. In some cases, the IRS may even waive negligence penalties where the taxpayer reasonably relied on a tax professional in filing the returns at issue or allow repayment via an extended monthly installment agreement over up to seven years. Our Tax Attorneys can help work out these kinds of agreements with the IRS if an audit rightfully discovers serious compliance problems and results in large assessment of additional tax, penalties and interest.
Can I Appeal an IRS Tax Audit if I Disagree with the Results?
If the IRS incorrectly believes it has discover discrepancies, errors, or underpayment, our Tax Attorneys can help, especially where the IRS got either the facts or the law wrong in reaching their incorrect conclusions through an appeal or litigation. There are multiple levels of appeal, some of which take your case to mediation, where a better agreement may be reached. Alternately, our attorneys can also get an appeal by filing a tax court petition to open litigation of your case with the U.S. Tax Court. If the IRS misinterpreted the law or committed technical errors in calculating your taxes, our Tax Attorneys, CPAs and EAs will fight aggressively to justify your tax positions and thus minimize the additional tax penalties and interest you ultimately face.
Should you disagree with the findings of an IRS tax audit, the first stage of the appeals process is to prepare either a “written protest,” or a tax court petition which must contain information as to the nature of your dispute, the basis for your dispute, and the laws and facts supporting your reasoning as to why the audit has produced incorrect, incomplete, or otherwise flawed findings. Be advised that appeals must be rooted in factual, financial discrepancies, as the IRS will refuse to accept requests for appeals “based on moral, religious, political, constitutional, conscientious, or similar grounds.”
Ventura County Tax Audit Defense Lawyers
The Ventura County Tax Attorneys, CPAs and EAs at The Tax Law Offices of David W. Klasing are ready willing and able to represent you in your IRS tax audit and fight zealously for your rights. We aim to prevent the IRS from destroying your finances, through the assessment of additional tax, penalties and interest and the associated disruption to your continued enjoyment of life. We are invaluable where a criminal tax issue underlies your fact pattern in protecting your liberty, continued livelihood and net worth. To schedule a reduced-rate consultation with our Tax Lawyers, contact our Ventura County office at 800-681-1295 or visit us online today.
