Compassionate Orange County FTB Audit Attorney Ready To Help You
FTB Audits
Much like the IRS, California has another department, the Franchise Tax Board, that also conduct audits to determine the state income tax that a business or individual must pay. These audits are more narrow in scope. For example, a common and recent one is a “residency” audit. As the name suggests, this audit determines the residency, which is an important factor that in turn determines the state income tax that must be paid. The way the residency is calculated is very tedious and confusing. If the FTB is auditing you or your business, consult with an experienced Orange County FTB audit lawyer today!
FTB Appeals
As with the IRS, the FTB has a thorough appeals process. It’s important to contact a trusted Orange County franchise tax board lawyer at Allison Soares, Attorney at Law as soon as you receive your FTB determination so you do not miss any of your appeal rights.
FTB Collections
While the IRS can go back as far as 10 years to collect money owed, the state of California has a different rule – they can go back as far as 20 years. This reinforces why you need a strong and knowledgeable Orange County franchise tax board attorney to represent you. The tax authorities in the state of California can be very aggressive when it comes to collecting owed money and the process is confusing for many. To avoid their harsh collection strategies, it is important to hire an experienced Orange County FTB audit attorney. Call Allison Soares and find out how what is best for your situation.
FTB State Voluntary Disclosure Programs
This is a special program that wants to ensure all entities, shareholders, members, beneficiaries, and partners who qualify, limit their exposure by disclosing their liability. This stems from an unpaid California tax liability or an unfulfilled filing requirement.
FTB Audit Tips
Carefully review the tax returns being audited, focusing on areas that might be flagged for discrepancies. Identifying potential issues beforehand can help in formulating a defense.
Consider settlement options such as offers in compromise if the audit results in a substantial tax liability. An attorney can assist in negotiating favorable terms.
Describe the process of what happens during and after the audit:
A tax audit is a review of your tax return to verify that your income and deductions are accurate. The FTB generally has up to four years to conduct an audit of your tax returns. The FTB will contact you in writing if your tax return is being audited. The letter should include what tax years are in question and what issues they are reviewing. The FTB will likely also ask for additional information to conduct the audit.
During the audit process, the FTB will work with you to schedule appointments (if required) and review deadlines. They will also review your support documents and give you a chance to respond to its position prior to closing the audit. The FTB may also send you Information Document Requests (IDRs) to gather facts, understand and verify the items you reported on your tax return.
After the FTB concludes your audit, you will receive a Notice of Proposed Assessment (NPA). The NPA will inform you that your tax return has been changed and that you may owe additional taxes, interest, and penalties. California taxpayers have the right to appeal the notice. It must be submitted within 60 days of the NPA date. The appeal can be done online on the FTB website. Once the appeal is received, the FTB has 120 days to contact you and establish a hearing date to review the appeal. The FTB may also ask you for additional documents and information regarding your case. Keep in mind that even if you are appealing the audit result, it does not stop the interest from accruing on the amount you’ve been assessed.
Discuss the statute of limitations
The FTB generally has a statute of limitations of four years from the date you filed your tax return to issue an audit and assessment. However, if you filed your return before the original due date, the FTB has four years from the original due date to issue its assessment. And if you did not file a return for the tax year, the FTB can issue its assessment at any time.
FAQs:
Why am I being audited by the FTB?
The FTB can issue an audit for personal and business tax returns for multiple reasons. The most common audit triggers are misreporting information such as income, math errors and incomplete information on the tax return. Other FTB audit triggers are excessive deductions and not filing your tax return on time.
Can I have someone represent me during the audit?
You have the right to representation during an FTB audit, as well as the right to have someone accompany you during an audit. To designate a representative, your auditor will require a completed FTB 3520, Power of Attorney, document.
What if I can’t find the documents requested by the auditor?
Contact your FTB auditor immediately and let them know you cannot obtain the required documents. You can also request a reasonable time extension. The FTB will generally work with you to obtain alternative information if you cannot locate a specific document. If the search is not successful, you can also explain the search method and attempt to justify the information that way.
If the audit reveals I owe money, do I also pay interest on the owed amount?
If you owe money as a result of an FTB audit, California law does require you to pay interest on the amount that’s accrued from the date the tax is due until it is paid in full.
Contact an Experienced California FTB Audit Lawyer Today
Always consult a professional Orange County, San Francisco, or San Diego FTB audit attorney to check avenues that can lead to a positive outcome. Our lawyer Allison Soares practices the following legal areas:
- EDD audits, appeals, and collections
- IRS tax matters and audits
- CDTFA audits
- Business law (business advisory services)
- Business formation
- Corporate law
- And other business tax matters in California
Call us directly or contact us online. Our lawyer looks forward to helping you take your business to the next level.
