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.
If you cannot come to an agreement in resolving the issue in the IRS examination stage, you still have a right to take your case to Appeals. As mentioned above however, it may currently be in your best interest to work with the IRS agent and not depend on the case to go your way in Appeals.
An area of difficulty that has arisen with regard to FBAR cases is the ambiguity of penalties potentially faced by an individual in violation of disclosure requirements.
There are many informational forms associated with international taxes and I am not sugar-coating this — they are complicated. To add to the angst, failure to file these forms or not file them on time can incur hefty penalties. In a later chapter, we will discuss the various compliance programs you may be eligible to participate in. I like to lay out all of the scenarios regarding penalties to my clients up front, so they know what we are potentially dealing with.
The acronym FBAR stands for Foreign Bank Account Report and refers to a disclosure form that must be filled out by certain taxpayers with respect to financial accounts maintained abroad. Although this is often a concern for the millions of expatriates living and working in foreign countries, FBAR applies to an even broader demographic of taxpayers.
In my years of representing clients before the IRS, I have been asked some common questions about the IRS, filing taxes and collections. The following is a compilation of my responses to some of the questions I hear the most from my clients. I hope that this Q&A section answers some of the questions that you may have. As always, if you have additional questions, please feel free to call me and I will do my best to answer them for you.