Blog Archives - Page 24 of 51

The IRS Collections Process in a Nutshell

May 25, 2026July 2, 2020 by Brotman Law

What is the IRS collection process? People not paying their taxes is a very serious issue for the IRS. It is something that we as tax practitioners call the tax gap. The IRS collection process is an increasingly serious step of collection measures designed to get people in compliance and make sure they stay in compliance.

Key Takeaways

What is the IRS collection process? People not paying their taxes is a very serious issue for the IRS.
One of the reasons people complain about penalties and interest so often is because it is a deterrent that the IRS uses to make sure that you do not owe money on your taxes.
Usually, the IRS will give you a lot of latitude and opportunity to resolve your tax issue within reason. One of the favorite sayings of the revenue officers that we deal with is that the IRS is not a bank.

The Consequences of Running From The IRS

July 5, 2026July 2, 2020 by Brotman Law

Key Takeaways

The consequences of running from the IRS are specific to federal tax laws that govern the ability of the agency to pursue and recover tax funds as well as those tax laws that govern your response to notices of tax deficiency.
It is important to understand that the statute of limitations for taxes never runs out. Specifically, “[t]he IRS has no time limit if you never file a return or if it can prove civil or criminal fraud” (Wood, “Even the IRS Has Time Limits,” 8/15/2013).
There are exceptions to this three-year rule. If you substantially understate your income, then the statute runs six years.

The Complete Guide to IRS Audits

May 25, 2026July 2, 2020 by Brotman Law

Key Takeaways

What Is an IRS Audit?
Types of Audits
How Does the Audit Proceed?
Presentation Is Important
What Constitutes Taxable Income?

What Is an IRS Audit?

It is every small business owner’s worst nightmare … they have been notified by the IRS that they are going to be audited. IRS audits have a lot of bad connotations, but on a very basic level, an IRS audit is the IRS coming in and checking that your tax return was filed correctly.

Frequently Asked Questions About the IRS Audit Process

May 25, 2026July 2, 2020 by Brotman Law

FAQs

Key Takeaways

The penalty structure in an audit can range anywhere from five percent, all the way up to a 75 percent. It depends on the conduct and the course of dealing during the audit and how the material is presented.
That is why it is really important to avoid the stigma of fraud going forward in your IRS matter. In the event that a civil fraud penalty is issued, the most likely course of action is an IRS appeals.
One of the important things to think about when you are hiring a representative or when you are making the decision on who to represent you in the audit, is how you are going to deal with the issue of penalties and mitigate them as much as possible.

California Sales Tax Audits: The Complete Guide

May 25, 2026July 2, 2020 by Brotman Law

Key Takeaways

If you are a small business owner in California, you should be collecting and reporting sales tax.
A sales tax audit is exactly what it sounds like; the government comes in and checks to make sure that sales tax was paid properly.
What does the sales tax audit process look like?

Sales Tax Audits

California Sales Tax Audits: Frequently Asked Questions

May 25, 2026July 2, 2020 by Brotman Law

FAQs

Key Takeaways

Yes, you can. If the CDTFA thinks you are willfully under-reporting sales tax and/or fraudulently filing returns, you can and will receive a criminal referral.
The goal with any potential criminal matter is to keep it civil and to minimize the damage as much as possible.
The CDTFA has a very rigid penalty scheme, particularly with respect to fraud penalties and sales tax that was collected but never paid to the state.

What is California Sales Tax Nexus?

July 12, 2026July 2, 2020 by Brotman Law

What is a Sales Tax Nexus and How Does it Affect My Business?

Key Takeaways

What is a Sales Tax Nexus and How Does it Affect My Business.
A state may create legislation requiring a seller with nexus in that state to pay tax on sales of tangible property within the state.
Most states declare your business has a nexus if you have any physical presence within the state.

Common California Sales Tax Mistakes (And How to Avoid Them)

May 25, 2026July 2, 2020 by Brotman Law

Sales Tax Mistakes to be Aware of and How to Avoid Them

Key Takeaways

As a retailer or other seller of products, you have a lot of details to attend to but one of the most important, often most complex, is your sales and use tax obligations.
Non-payment of sales and use tax comes with stiff fines, potential jail time and repayment requirements. Avoiding all that is essential to both your business and your well-being.
Here are some of the most common tax mistakes sellers make with regard to sales tax and how to mitigate your chances of making them yourself.

Common California Sales Tax Audit Triggers

May 25, 2026July 2, 2020 by Brotman Law

Key Takeaways

This one is pretty obvious, and it is not that hard for the CDTFA to find out.
Any time you are selling goods in the State of California or purchasing goods from out of state and bringing them into California (even if it is just passing through) without paying sales or use tax, you can be audited.
If you or your vendors are audited by the CDTFA, it can trigger follow-up investigations by other agencies.

Technical Issues in California Sales Tax Audits

May 25, 2026July 2, 2020 by Brotman Law

California Department of Tax and Fee Administration Audits — Short Tests and Sampling: Part One

Key Takeaways

The CDTFA uses short tests to come up with a decision as to whether to proceed or to accept as correct that item being tested. In fact, the CDTFA encourages its auditors to use short tests when a taxpayer’s records are in order.
A short test may be defined as the examination of any record, supplemental data, original detail, etc. for any purpose. A short test audit may be a combination of several short tests.
A short test might be, for example, the review of an income tax return to see if the markup over cost is acceptable for the type of business, a spot check of sales invoices for proper tax accrual, etc.