Taxpayers living in California already have to deal with the IRS when it comes to problems with one’s federal income tax return and other tax filings. However, like residents of most other states, Californians also have state tax obligations to report and pay. Like with federal taxes, the failure to pay one’s state taxes can lead to significant fines and penalties. Thus, taxpayers have a strong interest in ensuring that all state tax obligations are satisfied. If you are worried about mistakes on California state taxes or are facing a tax audit, the attorneys of the NewPoint Law Group can fight for you. If you merely have concerns, we can assess your likelihood of facing a tax enforcement action. If you are already facing an audit, we can work to develop a game plan to meet the challenge of your audit. To schedule a confidential consultation, call 1-800-358-0305 or contact us online.
What Taxes Does the California FTB Oversee?
The California FTB is responsible for overseeing both the individual and corporate state income tax. In California, most individuals are required to file income taxes because income thresholds triggering the duty are extremely modest. When individuals have an obligation to file taxes and pay taxes but fail to do so, penalties can be imposed. These penalties plus interest can transform a routine mistake into a major tax liability.
What Can I Do if I Have State Tax Problems?
Since every situation is unique in terms of both facts and case development, it is important to engage in a meticulous inquiry to gather information and evidence. Based on the facts that are gathered, your attorney can set forth one or more potential paths forward. For instance, if you come into the NewPoint Law Group concerned about several years of failing to file taxes, we might suggest filing the delinquent tax returns. Furthermore, we would set forth any unpaid tax obligations, penalties, interest, and potential relief that may be available. If you are already facing a tax audit, it is prudent to work with a tax professional. Auditors from the state of California are known to be particularly aggressive and will not hesitate to leverage any uncertainties you may have regarding tax laws. Auditors and investigators may work strategically to get you to make inconsistent statements. They may also work tactically to gain access to your home or business to familiarize themselves with your assets and sources of income, respectively. It is essential to remember that an auditor from the California FTB is highly trained, competent, and engages in matters like your every single business day. Working with a tax lawyer can help level playing field when facing a tax audit.
Will the California FTB Know About Federal Tax Problems? Will the IRS Know About California State Tax Issues?
At least some potential clients who come into our office want to know if the California FTB will inform the IRS about tax problems. Others would like to know the answer to the opposite question: Will the IRS inform the California FTB of tax issued? Unfortunately, the answer to both questions is a qualified yes. While the FTB and IRS will not pass along information in all cases, it will when it detects certain improprieties likely to affect both state and federal taxes. For instance, when the FTB or IRS detect that a taxpayer is not reporting all income, this is a misstatement that can impact both federal and state taxes. Likewise, when the IRS or FTB detect inflated or fictitious business deductions, these misstatements can also impact one’s federal and state tax obligations.Therefore, when the IRS or FTB detect mistakes or improprieties like these, they are likely to pass on the information. Whether the IRS or FTB launches its own investigation or audit based on the information provided by its sister agency is often a function of whether the enforcement action is likely to result in a return on the enforcement “investment.
What Should I Do If I’m Facing a Tax Audit by The FTB?
If you are facing an audit by the California FTB, you face a situation where the possibility for significant tax liabilities and other consequences exists. The first step after receiving an audit notice is to understand why the notice was sent and what information the IRS is seeking. Next, it is essential to check the individual’s records and determine whether they are appropriate, sufficient, and likely to resolve the matter favorably. If not, we can offer suggestions and guide the process of reconstructing an individual’s or a business’s financials and tax statements. We can work to develop a comprehensive strategy to address your FTB audit and its challenges.
Contact Strategic Tax Lawyers in Sacramento & Roseville California
The tax lawyers at the NewPoint Law Group can assist with an array of state tax issues. We can handle all aspects of your interactions with the California Franchise Tax Board including routine tax preparation work, tax controversies, tax audits, tax litigation, and tax appeals. To schedule a confidential initial consultation at our Roseville or Folsom law offices, call 800-358-0305 or contact us online.