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Should I Hire a Criminal Defense Attorney or a Criminal Tax Attorney? Which One is Best?

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Key Takeaways

  • So I think it’s a good idea to have a blend of both, and what I really recommend is, no matter whom you hire, whether it’s our firm or somebody else, go interview them, go talk to them about what t…
  • So make an informed decision, talk to criminal defense counsel, weigh the pros and cons, and make a decision from there.

Should I hire a criminal defense attorney, or should I hire a criminal tax attorney? My answer depends. There are different people who do different things. My experience with criminal defense attorneys is that most criminal defense attorneys have a good handle on state cases because they see a lot of them. Even among those who handle federal cases, a lot of them do not practice tax cases very often. They may have experience trying a criminal tax case because oftentimes charges from the tax world get wrapped up into things like money laundering and bank fraud and a whole host of other crimes. But they’re not specifically a tax specialist.

A tax specialist is very valuable during a criminal tax investigation because we kind of understand the playing field. We know how the civil audit side is supposed to respond. We know how civil collections works. We know what constitutes willfulness in a tax case. We know what positions the client takes, we understand the return. So a criminal tax attorney really understands these issues and can really work to mitigate.

The downside with a lot of criminal tax attorneys is trial experience. Criminal tax attorneys live in the tax world. We are not necessarily experts in criminal tax procedure. So if your case goes to trial, you probably want somebody who’s an expert in criminal trial procedure. Most criminal defense attorneys, because they spend the majority of their time in the courtroom, are experts at criminal defense and criminal defense procedure.

So, what I usually do is I recommend a combination of both parties. If you have a team of people who have criminal tax experience and potentially criminal trial experience, then you’ve got a very well-rounded defense team. And oftentimes, a lot of our most successful cases come with working in tandem with criminal defense counsel. It’s not always needed. You don’t necessarily have to hire two attorneys, and oftentimes the criminal attorneys can kind of divide the work so they’re not doing everything together necessarily. But it’s a good thing to have. If you’re going to be charged with a criminal matter, if you’re in the middle of a criminal investigation, or even if you have reasons to suspect, you want to have the best team possible because the consequences are so severe.

So I think it’s a good idea to have a blend of both, and what I really recommend is, no matter whom you hire, whether it’s our firm or somebody else, go interview them, go talk to them about what their level of experience is, go talk to them about ways they think they can help in the investigation and get honest feedback. You know, you have the right to choose who your counsel is.

So make an informed decision, talk to criminal defense counsel, weigh the pros and cons, and make a decision from there.

What Are Reasonable Goals in an IRS Criminal Investigation?

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Key Takeaways

  • So with the disclaimer that when cases are turned over to the US attorney, the US attorney has a 90 percent conviction rate in criminal tax cases, it’s important to understand what goals are at the…
  • So number one at the very least, most criminal tax charges can be mitigated because a lot of the times, what you’re dealing with is when you have a pattern of criminal conduct, it’s exactly that.
  • It occurs over multiple years, it occurs over multiple tax returns and the tax loss has to be enough in order to whet the appetite of the US attorney.

So with the disclaimer that when cases are turned over to the US attorney, the US attorney has a 90 percent conviction rate in criminal tax cases, it’s important to understand what goals are at the outset. So number one at the very least, most criminal tax charges can be mitigated because a lot of the times, what you’re dealing with is when you have a pattern of criminal conduct, it’s exactly that. It’s a pattern. It occurs over multiple years, it occurs over multiple tax returns and the tax loss has to be enough in order to whet the appetite of the US attorney. They don’t go after people for five or ten thousand dollars, they’re looking for bigger cases because they’re dealing with limited resources and they’re looking to send a message. So at the very least Tax Counsel can come in and try and mitigate the tax loss, mitigate the charges and reduce things down. That happens at the US attorney level. By the time you’re talking about charges and plea agreements and all this, that’s usually what happens in a lot of cases, though if you have the facts to support it you can completely derail a criminal investigation. Criminal investigations have a very high bar. You have to prove beyond a reasonable doubt that someone did something so there’s a lot of things that you can do to throw roadblocks into the system. There’s a lot of things that you can do to work with the criminal agents and work with the US Attorneys to achieve a global resolution, a resolution to the civil and criminal side of things. So for example, if you run a business and you are accused of committing tax fraud in that business, we can plead the business to criminal charges and reduce the criminal charges or eliminate them for the individual coupled with payment of the tax or something like that. So there’s a lot of reasonable goals. It depends on number one the facts of the case, number two the tax loss and how much culpability you really have. So anything really is possible but it’s important that you’re honest with yourself at the beginning. That you’re honest about the conduct, that you’re candid with your attorney. Your candid conversations with tax counsel are protected under attorney-client privilege. Then let’s just sit down and lay the cards on the table and call it what it is and then from there you can build a strategy that works around reasonable expectations for the case at the very least though a reduction in criminal charges or elimination of them. That’s a pretty good goal and I think it’s one that’s fairly achievable depending on the facts of your circumstance.

Is It Possible to Just Pay My Taxes and Make the Criminal Investigation Division Go Away?

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Key Takeaways

  • No, when a case reaches the level where IRS Criminal Investigation is involved, paying the taxes is beyond the point because what they’re doing is they’re looking at your conduct and even payment o…
  • So it’s a nice thing to do but at the same point it’s not going to make your criminal charges go away completely.
  • Now the good news is that payment of tax can mitigate the tax loss so it can let some of the air out of the tires with what they’re charging you with because look at it from a practical perspective.

No, when a case reaches the level where IRS Criminal Investigation is involved, paying the taxes is beyond the point because what they’re doing is they’re looking at your conduct and even payment of the tax doesn’t eliminate your past conduct. So it’s a nice thing to do but at the same point it’s not going to make your criminal charges go away completely. Now the good news is that payment of tax can mitigate the tax loss so it can let some of the air out of the tires with what they’re charging you with because look at it from a practical perspective. The US attorney is saying we’re going to charge you with these crimes and you know you did all this stuff and in front of the government and bla bla bla bla bla. Well if you pay the tax and the interest and the penalties, then there’s really not a whole lot of harm. I mean there’s still harm but it’s a lot less of an appetizing case for a prosecutor if they can’t stand in front of the judge and argue a tax loss. So the answer is no, it doesn’t make it go away but yes, it can help if used strategically within an investigation. What I recommend is don’t just pay the taxes immediately. Wait, develop a strategy and offer that as a carrot, potentially in the future, to help mitigate your criminal exposure. It’s better to play your cards at the right time than to hurry up and just do things without any sort of strategy in place so sit down with a criminal tax attorney, build a plan and then execute upon that plan over the course of the investigation.

Generally, What Is the Firm’s Strategy in Criminal Cases?

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Key Takeaways

  • So strategy is the key word in that sentence.
  • We are very strategic and very deliberate with how we handle criminal tax cases.
  • We want to steer the case from being a criminal matter to going back to being a civil matter or being eliminated entirely so we take a very protective approach.

So strategy is the key word in that sentence. We are very strategic and very deliberate with how we handle criminal tax cases. We have the advantage as a firm having a very broad knowledge of tax and in a very broad knowledge of how criminal tax cases get developed and prosecuted, so when we go into a situation, obviously it’s very fact-specific but we’re looking at avenues constantly to defer criminal charges at every opportunity. We want to steer the case from being a criminal matter to going back to being a civil matter or being eliminated entirely so we take a very protective approach. We’re building up defenses, we’re working to insulate the client from any particular liability and then we’re also going on offense. The best defense sometimes is a good offense so we don’t necessarily want to litigate the entire case in the investigation stage and share facts that the criminal unit may not have been aware of but we also want to throw up roadblocks to get in their investigation, to deflate things that they may think, to challenge things that they’re building the case on, to sabotage the evidence that they have, to convince them that our guy isn’t the guy that they should be going after, that they need to target somebody else or at the very least just leave us alone. So there’s constant deliberation in all this process and I’m working to prevent the best strategy possible in any criminal investigation.

Why Should I Hire Brotman Law to Defend Me in My Criminal Tax Matter?

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Key Takeaways

  • When you go through a criminal tax case, there are a lot of different phases.
  • Criminal tax cases are marathons and not sprints.
  • They can be multi-year investigations, they’re a huge commitment they’re a huge threat because of the success rate of the US Attorney’s Office.

When you go through a criminal tax case, there are a lot of different phases. Criminal tax cases are marathons and not sprints. They can be multi-year investigations, they’re a huge commitment they’re a huge threat because of the success rate of the US Attorney’s Office. There is a 90% conviction rate, so you have to be on guard. They don’t take Criminal Investigations on the IRS side unless they think they’re going to be successful in a conviction and the biggest problem for clients is not just the jail time; the criminal investigative process can take so much out of a client because there are so many other negative effects between the impact that it has on a client’s family and on their children, the impact that it has on a client’s business and their professional relationships, and all those things are potentially at risk even if there is an ultimate exoneration in the case. So from our end our firm really has a lot of experience in dealing with these types of cases. We know tax in all phases of the civil side and we know it in all phases of the criminal side and so when we take on a matter, there’s a lot of strategy that goes in that process. There’s a strategy in terms of how we’re going to handle this from a legal perspective, there’s a strategy involved in terms of how we’re going to handle this from a resource perspective and it’s a fight now. Make no mistake about it; these are the biggest stakes that we face in any one of our matters, because there’s a real possibility that at the end of the day our client is going to end up in jail and we take that very seriously so we’re going to do everything that we can on our end to mitigate any consequence. We’re looking constantly for avenues to turn the case civil, to make it go away, to reduce things down to the lowest level possible – we’re constantly throwing up blocks in the investigative process. We’re constantly working with the US Attorneys and the agents to take the air out of their case and we’re fighting as hard as we can on behalf of our clients. I think it’s our tenacity that really separates us as a firm because we have the experience in going through these cases. We can empathize with our clients and we fight on their behalf, because it’s personal to us so that’s the thing I think that really separates us. What I would invite you to do is if you’re watching this and you want to know more, come sit down and talk with us. Come meet me. Come meet our senior team. Let me lay out the facts of your case and let’s figure out if it’s a good fit. If it’s not a good fit, I promise we’re not going to take the case but what I can say is if we get a sense of what the conduct is, we get a sense of what the risks are and we can develop a strategy to help mitigate those risks, I promise you that whether or not you make the decision to retain us, you’re going to be better served by walking out of our office. If you’re not better served by sitting down with us then I haven’t done my job as an attorney and I don’t tolerate that so I think those are all the reasons why we make the best criminal tax team and why you should think about retaining us as a firm.

What Is an EDD Payroll Tax Audit?

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What is an EDD Payroll Tax Audit? So a payroll tax audit is kind of what it sounds like it is the auditor coming in and doing a check to make sure that payroll was properly recorded and that payroll taxes were properly paid so a payroll tax audit doesn’t necessarily mean that you’ve done anything wrong although the way that the EDD operates there is a suspicion on their side that you have done something wrong. The EDD doesn’t usually just bought it returns at random it’s going after returns and tax payers that it believed have a high propensity of error that’s why it wants. The EDD doesn’t have unlimited resources so it has to pick and choose those resources but from a taxpayer perspective whether or not you have an issue an edu audit is nothing more than a check on how you’re reporting your payroll and how that taxes.

Key Takeaways

  • What is an EDD Payroll Tax Audit?
  • The EDD doesn’t usually just bought it returns at random it’s going after returns and tax payers that it believed have a high propensity of error that’s why it wants.
  • The EDD doesn’t have unlimited resources so it has to pick and choose those resources but from a taxpayer perspective whether or not you have an issue an edu audit is nothing more than a check on h…

How Are Individuals/Companies Selected for Audit? Why Am I Being Audited?

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Key Takeaways

  • How are companies selected for audit by the EDD?
  • Why have I been selected for audit by the EDD?
  • So there’s a variety of factors that get you in the crosshairs of a payroll tax audit.

How are companies selected for audit by the EDD? Why have I been selected for audit by the EDD? So there’s a variety of factors that get you in the crosshairs of a payroll tax audit. Some of those are innocent factors and some of those are not so innocent factors. The EDD operates on what they call a lead system. So In order for a payroll tax audit to happen, a lead needs to get generated from somewhere. So what that can be is if you’re going through a workers’ compensation audit with the EDD or a wage-an-hour audit with the EDD, sometimes those will trigger a referral. The EDD gets referrals from what they call their underground economy unit, which is for taxpayers that are not filing or reporting properly. And the EDD also gets leads from a variety of other things, like if you file more 1099s than W2s, or if they see a huge change in payroll from you to year, or so on and so forth.

So there’s a variety of factors that can get you triggered, and it’s important to understand the outset what probably got you triggered, because That’s the area that the auditor’s likely going to focus on. The auditor is still going to go through their process. They’re still going to go through the tests involved in an ADD audit, but they’re going to be focused on the area that’s the biggest cause for concern. So by understanding what that area is and how it relates to you as a company, then you can work to mitigate that issue and increase your likelihood success that you’ll pass the EDD audit with flying colors.

What Are the First Steps I Should Take in an EDD Audit?

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Key Takeaways

  • So the first steps usually taken on an EDD audit are understanding what your risk is.
  • In gathering documents, first gather your payroll records.
  • Is there anything about your payroll records that is out of the ordinary?

So the first steps usually taken on an EDD audit are understanding what your risk is. In gathering documents, first gather your payroll records. Is there anything about your payroll records that is out of the ordinary? For most people the actual filing and reporting of their payroll and paying out tax for w2 employees is not really a huge issue. It often relates to wage, hourly or overtime considerations or so on and so forth, but for most people, if you use a payroll company, it’s just pretty straightforward. So a lot of times with EDD audits, those first two tests get passed pretty easily. What most risk in an EDD audit is the second couple of tests. It is looking for taxable wages that weren’t reported but should have been reported. Payments that are on a general ledger that perhaps should have been picked up as wages, compensation of officers that should have been picked up as wages and wasn’t, and the most famous thing in payroll tax audits is the independent contractor and misclassifications issues that happen frequently. That by far is probably the most common red flag and an EDD audit is California going after misclassification issues. But the first thing that you need to do is gather all your documents, assess your risk and then speak with a professional to at least gauge what the reaction is. Whether your understanding of what the risk is matches that of a professional’s. Normally the problem that I encounter as a tax attorney is most businesses adamantly believe that their independent contractors are truly independent contractors and the problem is my understanding of what an independent contractor is based on the law in California and how the EDD looks at EDD independent contractors is different a lot of times from our client’s understanding of what constitutes an independent contractor. The same thing goes for payments towards officers, the same thing goes for other payments that perhaps should be reclassified as taxable wages. So it’s important, like going to a doctor or going to an auto mechanic, to get a second opinion on the risk that you are going to face. That’s not necessarily saying that you need to hire a tax attorney although in most situations it’s a good idea when there’s an element of risk but at least seek the advice of a professional so that you know what you’re walking into and do all this way before you contact the statement. The best thing to do is to get your facts in advance, put your strategy in place and then go forth and deal with the offer.

What Does the EDD Payroll Tax Audit Process Look Like?

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Key Takeaways

  • So the payroll tax audit process is pretty straightforward.
  • The first thing that happens is that you’re contacted and notified that you’ve been selected for audit and the EDD will ask you to fill out a questionnaire.
  • Once you fill out that questionnaire then you’re usually assigned to an auditor.

So the payroll tax audit process is pretty straightforward. The first thing that happens is that you’re contacted and notified that you’ve been selected for audit and the EDD will ask you to fill out a questionnaire. Once you fill out that questionnaire then you’re usually assigned to an auditor. After that questionnaire is filled out and upon the assignment to the auditor, the auditor will call you or call your representative and schedule a date for the audit meeting. At that point that’s also a very good time to go through the auditor’s document request, which is a pretty standard document request and see if you can limit the testing period to one year. That will reduce the amount of documents that you have to provide and it will also make the audit process go a lot smoother. At the first meeting with the auditor, what you’re going to be doing is you’re going to be doing four things. Number one you’re going to be reviewing the taxable wages that were paid. Number two you’re going to review the tax that was paid. Number three you’re going to be looking for payments on the general ledger or other payments that were made that potentially should have been subject to payroll tax and number four you’re going to be looking at the classification of any outside workers or any independent contractors. So that’s what you’re going to be running through. When we take on a client we always like to pre-audit them so that we know exactly or in a reasonable degree of certainty exactly how things are going to fall. Then we go into the audit and we’re very well prepared and we can walk through that sequence. Assuming the sequence goes correctly, the auditor will review the information, come to a determination usually within a few weeks or a couple months time and then send the results. If not, then the auditor will will issue a supplemental document request. They’ll ask for more information and they’ll continue to work the case file while the EDD is going through and formulating their results and they’re also reaching out to third parties. They’re reaching out to any independent contractors and they’re reaching out to any outside vendors and so this gets to the point where the auditor is issuing an audit report.

What Do EDD Auditors Look for in a Payroll Tax Audit?

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Key Takeaways

  • Topic: What Do EDD Auditors Look for in a Payroll Tax Audit?
  • Read the full article below for complete details on this topic.

What Do EDD Auditors Look for in a Payroll Tax audit? So 88 auditors are looking for for things in the context of a payroll tax audit and there they seem simple but there’s a lot of nuances to them number one they’re looking for taxable wages that were reported so they’re verifying that the information that was given to the EDD was in fact the amount of taxable wages that were paid and it’s consistent with reporting to the IRS number two they’re looking for the amount of tax paid so same thing they’re looking for consistency and the tax that was paid and the text that was reported to EDD number three they’re looking for payments that could be potentially reclassified as taxable wages so this is the point where they look at officer compensation they look at any payments that are on your general ledger that were issued to workers that may be considered taxable wages they look for personal payments that should be reclassified as taxable wages that’s what the EDD is doing when they’re going through the general ledger analysis the last thing that they’re looking for is they’re looking for any Mis classification issues through reviewing all the outside workers that the company has any vendors and they’re making sure that there are not taxable employees so there’s a fairly thick analysis that goes through that process there’s a lot of digging particularly on the last three items with a general ledger and the misc classification issues of the EDD ghoster but that’s what the auditor looks for as they go through the payroll tax audit process.

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