Dealing With Tax Problems
Handling tax problems is never an easy task to take on by yourself. The U.S. federal tax code is more than 2,500 pages long and California is notorious for having a complex set of tax laws. The IRS is not very forgiving when it comes to filing your taxes late or inaccurately. If the IRS believes your errors were willful, you could be facing time in state or federal prison. When you are facing fines, penalties or an audit, having an experienced tax attorney may save you thousands of dollars.
Why You Should Consult With Rita Holder Law
At Rita Holder Law, we have more than three decades of experience helping Californians with tax issues. To be clear, we do not help individuals or organizations prepare their taxes, we help deal with audits, accusations of tax crimes and charges of tax law violations. If you are unsure of how to respond to the notification you got from the state or the IRS, that is a sign that it’s time to speak with an attorney.
How To Respond To An Audit By The IRS Or The California Department Of Tax And Fee Administration
If you find out you are being audited, it can be stressful, but the key is to focus on exploring your legal options and finding solutions. With the help of our experienced team at NAPNAME, you can feel confident about how to proceed.
The first thing you likely need to do is to provide specific documentation that goes along with the audit. This could include:
- Balance sheets
- Expense reports
- Revenue reports
- Business ledgers
- State tax returns
- Federal tax returns
- Sales receipts
- Business invoices
- Bank statements
Essentially, the IRS needs this documentation to see if you have paid the correct amount of taxes or not. After all, the audit could determine that you have actually done everything correctly.
If you do not agree with the findings after the audit, you have 30 days to file an appeal against the findings. This is when it is most important to have an experienced lawyer on your side. Appealing the decision may lead to a new ruling, or it may buy you more time to consider other solutions.
Creating Payment Plans And Offers In Compromise
If you owe money to the IRS and are unsure how to pay it back, there are two potential options you may want to consider. In some cases, the IRS will let you create a repayment plan. You then make payments in monthly installments, making the tax debt more affordable than if you had to pay it all at once.
The second option is to use an offer in compromise. Sometimes, the IRS will determine that it is unlikely a person can ever repay the full balance. They may offer to forgive a portion of the debt and settle the account if you can pay a smaller amount.
For instance, perhaps you owe a debt of $100,000, but the IRS agrees to accept $25,000 and settle the account. Not everyone qualifies for an offer in compromise, but it is usually worth considering.
Hiring A Tax Attorney Versus A Certified Public Accountant
There are two main reasons you should not go to a certified public accountant (CPA) when facing audits and tax charges. The first is that CPAs do not have a CPA-client privilege like the attorney-client privilege enjoyed by lawyers. In a criminal investigation, a CPA must turn over all information related to your case if subpoenaed. This includes any damaging information or questions you may have asked that put you in a bad light. With an attorney-client relationship, the government cannot force you or our attorneys to reveal anything we discuss.
The second main reason to hire an attorney instead of a CPA has to do with the nature of the professional accountant industry. Accountants and accounting firms build their client bases largely on their reputation. If a CPA prepared the tax filing that was called into question, admitting they made a mistake could be career suicide and they are likely to blame you. We are not suggesting that all CPAs would do this, but remember that there is no CPA-client privilege and a CPA has more to lose than to gain by admitting a mistake.
Contact The Tax Attorneys At Rita Holder Law
If you are facing fines, penalties or a tax audit, contact Rita Holder Law to set up an initial consultation. Call 925-401-7885 or fill out our online contact form.