In an earlier chapter, we touched on wage garnishment as a means for the FTB to collect unpaid taxes. However, the other side of the fence can be if you are an employer and are called upon by the FTB to garnish wages of any of your employees.
There are certain types of people that will go to great lengths to save money. I’m not talking about eating a strict diet of ramen noodles and taking the bus when you could afford to drive – I’m talking about tax avoidance.
Under 26 U.S. Code §1041, you typically have a 6-year window of time from the date your divorce is finalized to make a transfer that is not subject to taxation. Once you go beyond 6 years, you are looking at two individuals that are divorced, transfer assets between each other could be considered a gift subject to different rules. Unless there is a valid reason that is beyond your control, the sooner you complete the transfer the better off you will be. Because the code specifies that the tax-free transfer must be incident to divorce, it may also help to include what the other spouse will receive under the divorce agreement.
Internally, we have developed the following list of issues based on our experience in past EDD payroll tax audits. Although not an exhaustive list, it will give you an idea of some of the mistakes that we have seen in preparing for audits and things to generally look out for.
What usually happens in a payroll tax audit is that the auditor will send you a laundry list of documents that they want to examine. Of the different types of audits, payroll tax audits are usually the ones that have the most flexibility because in a payroll tax audit they are basically running tests.
California Tax Evasion Penalties Generally
Generally, penalties for fraud or intent to evade are imposed only when tax deficiency determinations are made by the CDTFA and CDTFA must prove evasion to impose tax evasion penalty. The RTC sections that impose evasion penalties are as follows:
Sales tax audits are one of the areas of practice that I am most proud of at our firm. We have dealt with some very difficult cases and gotten some really phenomenal results. I credit that to the hard work and diligence of our team. Brotman Law really understands sales tax audits.
{{cta(’09b64408-9310-4451-9a41-0234b45d370e’,’justifyright’)}}Are you a marketplace facilitator or out-of-state business who has received a tax return demand from the California Franchise Tax Board? If so, read this before you respond. We’ve provided the essential background information you need to formulate a plan prior to your response.
If you are not in need of the Streamlined Procedures because you do not owe additional tax, and you have reasonable cause for not filing an informational return, you may file the delinquent information returns along with an explanation of the facts that support your claim of having reasonable cause for failing to file on time. You must do this before a civil examination or criminal investigation has been opened.
Previously, the IRS had two programs, Offshore Voluntary Disclosure Program (2009) and Offshore Voluntary Disclosure Initiative (2011), which have been discontinued. In their place, the IRS has implemented a new program “affectionately” known as Son of OVDP, but is still known as OVDP.