Federal and California (State) Audit Defense

With the federal and state governments increasingly in need of revenue to operate the society machinery, revenue agents are becoming increasingly aggressive and much less forgiving in the area of penalty abatements. Both the federal and state taxing authorities are going after non‐filers and a recent trend reflects increased scrutiny in the area of information reporting, such as for foreign bank accounts and information regarding foreign parent and subsidiary corporations. The Board of Equalization in California, which principally manages California’s collection of sales and use tax revenues, has been sending out “self‐audit” requests, asking taxpayers to audit their own books and records for unpaid sales and use tax for open periods (unbelievably the State now wants us to do their job for them). With the recent implementation of Financial Accounting Standard Board Interpretation 48 (“FIN 48”), the requirements for audits and reviews of financial statements now compel companies to effectively create a “road map” for all of the uncertain tax positions taken in returns for open years (both for federal and state purposes); taking into account tax, interest and penalties and without consideration for the likelihood of scrutiny concerning the issue.

At Barnthouse & Associates, LLP we believe that it takes more than just knowledge of the federal and state tax law to successfully defend a client when they are under audit. We take a more proactive approach to manage the audit and auditor and to minimize the time required by the client to prepare information and interface with the taxing authority. Managing the scope of the audit is the key to success when confronted with a potential assessment. When necessary, we have the experience to negotiate with the IRS or Franchise Tax Board to reach a settlement or “offer in compromise” where real exposure is present for our clients.

If you have been contacted by the Internal Revenue Service, Franchise Tax Board or Board of Equalization regarding an income, sales/use, payroll or property tax issue; contact us for assistance. We can help mitigate the tax and the worry associated with a pending audit.

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Barnthouse & Associates LLP © 2012
Tax Advisory and Business Consulting - Certified Public Accountants
1800 Quail Street, Suite 110, Newport Beach, CA 92660
Direct: (949) 637-0588 - Fax: (877) 578-0548

Disclaimer Statement: This Barnthouse & Associates LLP Internet site is provided for your general information and may not reflect changes to federal and state laws. Action should not be taken on the basis of these articles. Action should only be taken on the advice of your professional advisor after discussing the rules applicable to your specific situation.

Circular 230 Disclosure: Any advice contained on this website (including any attachments unless expressly stated otherwise) is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.