IRS Audits in San Diego
& Finding an IRS Audit Lawyer
The IRS (Internal Revenue Service) is the government’s official agency for enforcing US tax laws and collecting taxes. An IRS audit reviews an individual’s or a business’s financial records to ensure that the information reported on their tax returns is accurate and complete. The IRS can choose to audit a tax return for various reasons, such as random selection, high income, large deductions, or discrepancies found during previous audits.
An audit can be stressful and time-consuming, but it is vital to understand your rights and responsibilities as a taxpayer in California. If you are selected for a formal audit, you will receive a notice from the IRS, either by mail or email, indicating the reason for the audit and the documentation required to support your tax returns. It is advised to immediately seek the help of a local San Diego tax professional, such as a tax attorney, to guide you through the audit process.
Audits Can Be in Person or by Mail
When selected for an audit, you may be required to attend an in-person meeting at the IRS office, or the audit may be conducted by mail. The type of audit you receive will depend on the specific issues being examined and the documentation required to support your tax returns. Some common types of audits include correspondence audits, office audits, and field audits.
A correspondence audit is the simplest type of audit, and it is conducted by mail. The IRS will send you a letter requesting additional information or clarification on certain items reported on your tax return. In addition, you will be asked to provide documentation to support your claims, such as receipts, invoices, or bank statements. If you respond promptly and accurately to the letter, the audit may be resolved without further action.
An office audit is a more comprehensive review of your tax returns, and it is conducted at an IRS office. During the office audit, you will be asked to bring the required documentation and meet with the auditor. The auditor will examine your records and ask you questions about the information reported on your tax return. The audit may take several hours or several days, depending on the complexity of the issues being examined.
A field audit is the most extensive type of audit, and it is conducted at your place of business or residence in San Diego. During the field audit, the auditor will examine your records in detail and may ask to see your financial statements, bank records, and other documentation. The audit may take several days or weeks, depending on the scope of the examination.
Preparation and Cooperation Are Key
Regardless of the type of audit you receive, be prepared and cooperate with the auditor. You should promptly provide the requested documentation and be honest and accurate in your responses to the auditor’s questions. If you disagree with the auditor’s findings, you can appeal the decision, and you may wish to seek the help of a tax professional to assist you with the appeal process.
An audit does not necessarily mean that you have done something wrong. The IRS may simply be seeking clarification on certain items or verifying the accuracy of the information reported on your tax returns. However, it is crucial to be prepared and to provide the necessary documentation to support your claims. In addition, an audit can result in changes to your tax returns, which may result in additional taxes, penalties, or interest owed to the government.
In some cases, an audit can also lead to a criminal investigation if the IRS suspects that the taxpayer has committed tax fraud or evasion. In these situations, it is imperative to seek the help of a tax attorney, as the consequences of a criminal conviction can be severe, including fines, imprisonment, and loss of professional licenses.
Delia Law Can Help With IRS Audits in San Diego, CA
At Delia Law, we specialize in tax law and resolution services in San Diego, California. As experienced tax attorneys and enrolled agents, we understand the stress and complexities of undergoing an IRS audit. That’s why we offer comprehensive assistance to individuals and businesses facing this situation.
Why You Should Always Consider Hiring a Tax Lawyer
We work with our clients to ensure that they have all the necessary documentation to support their tax returns, and we represent them during the audit process to protect their rights. Whether our clients are facing a correspondence audit, an office audit, or a field audit, we are here to help them navigate the IRS audit process confidently.
If the audit results in changes to their tax returns, we can assist our clients with the appeals process, negotiate a payment plan with the IRS, or help resolve any other tax issues that may arise. Our goal is to provide personalized and practical solutions to our client’s tax problems.
If you are facing an IRS audit in San Diego, California, let us help. We can answer your questions and provide the support and guidance you need to resolve your tax issues. Contact us today to schedule a consultation.
California-Specific Tax Laws
California residents are subject to some of the highest taxes in the nation. The same applies to businesses operating in the state or people living outside of California but earning income from the state.
There are four main types of taxes in California:
- State income tax. For state tax in California, the tax rate for those filing as a married couple range from 1% to 12.3%, depending on the income bracket. If you make under $18,650, you are only required to pay 1% of your income in state taxes. However, the other end of the spectrum imposes a 12.3% tax rate on annual salaries of $1,250,739 or higher. There is also a 1% mental health service tax that is imposed on anyone making more than a million dollars a year.
- Local tax. At the local level, the amount you pay locally depends on the county and city in which you reside. There are a total of 58 counties in California, each with its own tax rate. For example, in El Dorado County, the tax rate is 0.25%, while in Orange County, the tax rate is also 0.25%, but with an additional 1.5% added in for local school taxes.
- Corporate tax. The corporate tax rate in California is 8.84%, which is higher than average nationally. These taxes are imposed on the majority of businesses, regardless of whether they are based in California or operate in the state.
Sales tax. In terms of sales tax, there is a statewide rate of 7.25%, which is again higher than average. However, some areas have rates as high as 10%. These taxes are generally imposed on retail items. Residents and shoppers of the state do get relief from sales tax on some essential items, such as no tax on groceries and prescription drugs, as well as reduced tax rates on clothing, prepared food, and over-the-counter medications.
