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California Tax Audit Statute of Limitations: Is Time on Your Side?

August 12, 2024April 27, 2016 by Brotman Law

A sales tax audit is a sobering ordeal, but it is one that many (if not most) California businesses will face eventually.

If you are selected for an audit by the California Board of Equalization (BOE), you will have to prepare a wide range of documents and records for your auditor to review, but how far back will the BOE want to look, and what are your rights?

Today, we will take a look at the California tax audit statute of limitations within the California sales tax audit process and what this means for your business.

What Is a Trust Fund Recovery Penalty (TFRP): Your Ultimate Guide

August 12, 2024April 6, 2016 by Brotman Law

If your company has been struggling with tax issues and the resulting penalties, the trust fund penalty (TFRP) can be a crushing blow with far-reaching consequences for your personal financial security and future.

But all is not lost…

Join us as we discuss common questions, such as “what is the trust fund recovery penalty?” and, “how do you avoid the trust fund recovery penalty?”

So, what is a trust fund recovery penalty?

Also sometimes referred to as the “responsible person penalty,” a trust fund recovery penalty is a personal liability that may occur if a company’s payroll taxes are not properly remitted to the Federal government.

Typical examples of employment taxes not remitted are Medicare and social security deductions from employees’ wages.

It forms part of the payroll tax audit, and is definitely not something you should ignore.

How much is the trust fund recovery penalty?

For uncollected tax, the trust fund recovery penalty calculation is the employee’s part of any withheld FICA taxes plus withheld income taxes, and will be the same amount as unpaid trust fund taxes. For collected taxes, trust fund recovery penalties are the unpaid amount of collected excise taxes.

An Introduction to Payroll Tax Fraud: EDD Investigations

August 12, 2024March 30, 2016 by Brotman Law

Payroll tax fraud can occur either through deliberate criminal activity or simply because an employer or employee has provided inaccurate or incomplete information. The Employment Development Department (EDD) takes payroll tax fraud extremely seriously, so it is imperative that you understand the ways in which fraud can occur and take the necessary steps to avoid committing fraud.

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Income Withholding Order: How to Process an EWOT

August 12, 2024March 16, 2016 by Brotman Law

Man handing over a check for ERC refund process 2025.

Being served with an income withholding order can be a disconcerting experience as an employer. These orders can come from a variety of sources, but they are all legally binding and require careful handling. Understanding how these orders work, what your obligations are regarding them, and how to comply with them is very important. Failing to do so can have severe consequences for you and your business.

Penalty Abatement: Eliminating FTB Tax Interest

August 12, 2024March 2, 2016 by Brotman Law

If you have an outstanding tax liability owed to the California Franchise Tax Board (FTB) past the due date, your tax bill is at risk of growing much larger over time. By law, the Franchise Tax Board must charge interest on unpaid taxes. This interest is charged from the due date until the date it is paid, is adjusted twice a year, and compounds daily.

On top of this interest, a delinquent penalty rate is charged. The rate is 5% of the total unpaid tax, and a further 0.5% for each month or part of a month over the due date that the tax remains unpaid, up to 40 months. Other penalties for returned checks, understatement, negligence and fraud may also add to the overall total owed to the FTB. There is no “reasonable cause” exception for interest due on your tax assessment. In some specific cases, however, you may qualify for tax interest penalty abatement. This concession from the FTB can make paying your late taxes less of a burden.

Tax Franchise Board Liens: When California Comes for Your Money

August 12, 2024February 24, 2016 by Brotman Law

The repercussions of an unpaid balance due to California Franchise Tax Board (FTB) can be severe, especially for a small business owner with everything to lose. The law allows the FTB to pursue payment of tax debts aggressively through a number of involuntary collection actions. All of these actions are deeply unpleasant, and some can be devastating.

If you have received a notice from the FTB requesting payment in full on a past due balance or informing you that a collection process has begun, you are probably under considerable stress. The first thing that you should do is make sure that you fully understand the situation, and if necessary, find qualified legal representation for the next steps.

Why Hire an Attorney for Sales Tax Representation?

August 12, 2024February 17, 2016 by Brotman Law

For small business owners with everything on the line, facing down a sales tax audit is a hugely intimidating prospect. In spite of all the possible complications during the audit process, we still see many people attempting to represent themselves before the Board of Equalization. When you are facing a frighteningly large sales tax determination and desperately trying to cut the costs associated with handling the matter, the temptation to tackle the audit yourself rather than investing in a qualified tax attorney can be strong. It is an understandable instinct, but it may not be in your best interest.

FAST Act Give IRS Power to Revoke Passports for Tax Debt over $50K

August 12, 2024February 10, 2016 by Brotman Law

The recent passage of the FAST Act has some people worried about their ability to travel and live abroad because of their IRS liabilities. Although Congress has long toyed with the idea of tying tax compliance to international travel privileges, the new law now codifies the ability of the government to restrict passports of anyone who owes the IRS more than fifty thousand dollars in outstanding and unresolved tax liability.

Opting Out of the Offshore Voluntary Disclosure Program (ODVP) – Part Two

August 12, 2024August 25, 2014 by Brotman Law

Here are the steps that IRS examiners take before a taxpayer makes the irrevocable decision to opt out:

Delinquent FBAR Submission Procedures

August 12, 2024August 24, 2014 by Brotman Law

Some taxpayers may not need to use the Offshore Voluntary Disclosure Program or the Streamlined Filing Compliance Procedure options, but still may have a delinquent FBAR or Foreign Bank Account Report. FinCEN has established a procedure to address this problem.[1]