California Tax Attorneys

IRS Tax Audits

The IRS usually chooses returns for audits based on a statistical formula, although it has the discretion to review other returns as well. An IRS tax auditor goes over each return and either accepts it or identifies certain issues before forwarding the return for an assignment to an examining group. If you are being audited by the IRS, you may feel confused and anxious. In some cases, tax audits lead to criminal prosecution. However, you have rights during an IRS tax audit, and our California tax lawyers based in Los Angeles can help you protect and assert those rights. Many of our tax clients have obtained a no change status or minimal payment on a tax audit, which means that nothing or very little is owed.

Sales Tax Audits

The California Department of Tax and Fee Administration administers and collects sales and use tax for the state. Through the California Department of Tax and Fee Administration CDTFA, the state has expanded its program for conducting sales tax audits of small to medium-size businesses. The purpose of an audit is to confirm whether a business reported the accurate amount of sales tax to the state. It also aims to promote state tax law compliance and increase state tax revenue. The California Department of Tax and Fee Administration sometimes has initiated criminal tax fraud actions based on sales tax audits, which makes it important for small business owners to approach the audit with careful assistance from a professional.

Tax Fraud Investigations

Tax fraud can involve a misrepresentation of income to the IRS. A misrepresentation may take the form of inflating deductions, underreporting income, or hiding money in offshore accounts. Anybody who willfully tries to evade or defeat a tax may face felony charges, which can lead to heavy fines and imprisonment. Our tax lawyers can help California residents fight to avoid these consequences. The IRS Criminal Investigation Division conducts criminal investigations of violations of the Internal Revenue Code, money laundering statutes, and the Bank Secrecy Act. Findings that the IRS may make can result in referrals to the Department of Justice for prosecution of tax fraud.

Offers in Compromise

You can reduce your IRS or state tax debt through a negotiation with a taxing agency to reduce a tax bill by making an offer in compromise. You can make three arguments during this negotiation. You can claim that you owe the tax but are not able to pay it, that the IRS is incorrect and you do not owe the tax, or that it would be unfair for the IRS to collect the tax. Most taxpayers raise the first argument. Generally, if this is your argument, you will need to offer to pay an amount equivalent to what your assets are worth, along with the money that the IRS thinks that it can collect from your future income for 4-5 years. The IRS will reject your offer if it believes that what you offered is less than what it could collect through regular collections processes. This makes it important to consult an experienced California tax attorney about your situation.

Tax Bankruptcy

You can discharge debts for federal income taxes in Chapter 7 bankruptcy if certain conditions are met. The taxes at issue need to be income tax debt that is at least three years old, and you cannot have perpetrated fraud or willful tax evasion. You need to have filed a tax return, and the IRS must have assessed income tax debt at least 240 days before you file a bankruptcy petition. It is important to work with an attorney who understands the complexities involved in attempting to obtain a discharge for tax debt through the bankruptcy court. The first step in bankruptcy filing mandates an in-depth review of tax records and a detailed analysis of finances.

OVDP and Foreign Bank Accounts

Taxpayers who have exposure to potential criminal liability or substantial civil penalties because of a willful failure to report foreign financial assets can pay the tax that is due with regard to those assets through the Offshore Voluntary Disclosure Program (OVDP). This program is designed to provide taxpayers with protection from criminal liability and terms for resolving civil tax and penalty obligations. Some taxpayers who opt out of the OVDP are subject to maximum willful Foreign Bank Account Reports (FBARs) and civil fraud penalties. We can advise you on whether you should opt into the OVDP and how to follow the required steps.

Tax Levies

Taxing authorities have significant power to seize property when collecting tax debts. A tax levy is a procedure that is used to collect money, but it can be carried out in various ways. For example, the IRS can ask your bank to stop you from withdrawing funds from your account for 21 days, while the bank withdraws funds that will be forwarded to the IRS. For another example, in a wage garnishment, a taxpayer’s employer must hold back some pay and send it to the IRS until the debt is satisfied. The IRS usually levies only after assessing tax and sending a tax bill. If you refuse to pay or fail to pay, it will send a Final Notice of Intent to Levy and a Notice of Your Right to a Hearing.

Retain an Experienced Tax Attorney in California

Tax Lawyers Group welcomes you to browse through the information on our website. In it, you will find answers to some of the questions that you may have concerning your tax problems. We welcome any further inquiries that you may have concerning your tax problems or bankruptcy matters. Feel free to call us at (888) 553-8000 or contact us via our online form. We will respond to all relevant inquiries without any obligation. With offices located in Los Angeles, Long Beach, Torrance, Sherman Oaks, Pasadena, San Francisco, Oakland and throughout other communities in Northern and Southern California, our tax attorneys are prepared to defend all California taxpayers.