California Tax Audit and Appeals Attorney

Facing an IRS or California Tax Audit?

Did you get a notice that you are being audited?

Many clients picture a huge bureaucracy with unlimited resources that can fight against them indefinitely, and with tools like garnishment, levy, and lien at their disposal, the stakes are high. But with the right representation, you don't have to face it alone.

How Likely Is a Tax Audit?

Your chances of being audited are not high unless another issue is discovered in your return.

Only 0.44% of taxpayers were audited in 2023. That rate increases to 1.1% for taxpayers earning between $500,000 and $1 million, 2.21% for incomes between $1 million and $5 million, and 4.21% for incomes between $5 million and $10 million.

While audits are not common, they become more likely as income increases and returns become more complex.

Why Tax Returns Are Selected for Audit

There are several reasons a return may be audited beyond random selection:

• Each line of your return is scored against other similar returns. If the total score exceeds a threshold level, the return may be identified by the IRS computer system for examination.
• Returns may also be reviewed based on total income, excluding losses, with additional scrutiny applied to artificial losses and their potential audit impact.
• In other cases, IRS staff manually review returns and select those with the highest tax potential. Taxpayers with a high percentage of cash transactions often fall into this category.
• Another common trigger is an automated underreporter audit. The IRS matches information forms such as W-2s and 1099s against reported income. If income appears underreported, an audit may follow.

What are Types of Tax Audits?

If you are audited, the type of audit you face can vary:

• A correspondence audit involves the IRS requesting additional information by mail to support items on the return. The IRS recalculates the return based on the documentation provided. A common example involves taxpayers who received medical insurance assistance through the Affordable Care Act but failed to report it. In those cases, the IRS may request Form 1095-B.
• An office audit requires you to meet with the IRS at their office. This generally indicates a more serious issue that justifies additional time and review.
• A field audit is the most onerous type of audit. IRS agents come to your home or business to review records and assess lifestyle and operations. This type of audit carries the highest risk of additional tax, penalties, and interest, and in some cases can lead to a criminal investigation.

What Happens After an Audit Is Completed

Once the audit is complete, you will receive the audit findings and typically have 30 days to challenge the results.

If the additional tax, overassessment, or claimed refund does not exceed $2,500, a formal protest is generally not required. Larger disputes require a formal written protest explaining why you disagree with the findings. This protest must be signed under penalty of perjury.

After an appeal is submitted, it can take approximately 90 days to receive a response. The case may be settled, returned to the revenue agent, or proceed to Tax Court if necessary.

Once a federal audit concludes, the IRS may share the information with state tax authorities. In California, this often results in a separate audit initiated by the Franchise Tax Board.

Why Legal Representation Matters in Tax Audits and Appeals

An audit is a difficult and trying endeavor for any taxpayer. Most taxpayers do not understand the strategy or process used by the Internal Revenue Service or the California Franchise Tax Board. As a result, they are often unable to develop an effective defense to limit additional tax assessments, penalties, and interest.  Sometimes they may volunteer information to the agent that is unhelpful to their defense and that may increase the scope of the audit.

The earlier an experienced attorney becomes involved in the audit or appeal process, the more manageable the process typically becomes.  

What Sets Our Tax Audit and Appeals Approach Apart

The firm approaches tax audits and appeals with preparation, clarity, and long-term perspective. Drawing on decades of accounting, audit, and legal experience, the goal is to understand how tax authorities evaluate returns and documentation, not just how to respond to notices.

Clients are guided through the process step by step, with a focus on clear communication, strategic decision-making, and reducing unnecessary exposure wherever possible. The firm’s role is not just to respond to an audit, but to help clients understand what is happening and why, so they can move forward with confidence.

Don’t Face Your Tax Matter Alone, Talk With a California Tax Audit and Appeals Attorney Today

If you are facing an IRS or California Franchise Tax Board audit, early guidance can make a meaningful difference. Understanding your options, obligations, and strategy from the beginning helps reduce stress and protects your interests throughout the process.