The State Board of Equalization (BOE or SBE) is responsible for enforcing sales and use tax laws and regulations in California. Sales tax is imposed on businesses which sell tangible personal property and is measured by gross receipts minus any non-taxable sales. The State Board of Equalization is the California authority charged with the assessment of sales and use taxes and audit of sales and use tax filings of all businesses in the state of California and any business engaged in transactions within the state of California that create a nexus for purposes of sales and use tax. The State Board of Equalization is responsible for the collection of unpaid sales and use taxes, applicable penalties, and interest. The sales and use tax audit and appeal process is complicated requiring sustainable technical knowledge of California sales and use tax laws, as well as an understanding of State Board of Equalization procedures and binding precedent. At Eaker Pérez Law, we have the experience and know how to protect the rights of your business during a sales tax and use audit. We will advocate for your business through the State Board of Equalization audit appeals procedures to assist you in the appeal of your State Board of Equalization audit.
The State Board of Equalization has the authority to arbitrarily audit any business transacting business in the state of California.
The State Board of Equalization has a variety of methods it uses to conduct a sales and use tax audit, depending on the type of business. Regardless of the methodology, the auditor will likely request the following records: income tax returns, general ledgers, sales ledgers, balance sheets, invoices, receipts, purchase and sale journals, contracts, bank statements, depreciation schedules, and documents related to claimed exempt transactions.
After the sales tax audit is completed, the auditor will often schedule an exit conference. The purpose of the exit conference is to explain proposed additional sales taxes. If a settlement on additional sales taxes cannot be reached at that time, the State Board of Equalization will issue a Notice of Determination. The Notice of Determination allows a business owner 30 days to file a petition to appeal or challenge the State Board of Equalization audit results along with any penalties assessed through the sales and use tax audit. If the business does not file a petition, the audit results become final and the proposed additional sales and use tax is assessed. Once sales and use tax is assessed the business owner must pay the full amount of the additional tax liability and any applicable penalities and interest. If the business files a timely petition, the business has the opportunity at several different stages to discuss resolution of their audit dispute and have their appeal heard before the elected officials that serve on the State Board of Equalization.
Sales and use tax audits are not the only issues California businesses – and businesses deemed transacting business within the state of California – In addition to sales and use taxes of the business, the State Board of Equalization has the ability to personally assess any individual that knew sales and/or use tax was due and owing where that individual had the ability to direct payment of that sales and/or use tax and failed to do as a responsible party.
California business owners must be aware that operating a business in California without a valid seller’s permit is a criminal offense. Any California business may be subject to criminal charges for operating a business without a valid sales tax permit.
The State Board of Equalization participates in information sharing agreements with other state and federal agencies and may share information obtained about a business or individual with the Employment Development Department, the Franchise Tax Board, the IRS, among others.
At Eaker Pérez Law, we are ready to help you and your business with your sales and use tax issue. Put our experience in sales and use tax issues and technical knowledge of the California Revenue and Tax Code to work for you. Contact Eaker Pérez Law, to see how we can help you and your business prosper.
Alexandra Eaker Pérez regularly represents clients accused in criminal tax proceedings. The most common tax crimes include tax evasion, failing to file income tax returns, filing false income tax returns, obstruction, money laundering, mail fraud, wire fraud, under-reporting of income, submitting false documents, and making false statements or claims. While the Government must prove “beyond a reasonable doubt” that a taxpayer failed to report their correct tax liability and additional sums are due, the U.S. Department of Justice claims over an 80% incarceration rate.
The government uses several methods to prove tax crimes, including direct evidence, the net worth method, the expenditure or lifestyle method, and the bank deposit method. With the direct evidence method, the government seeks to establish a tax crime via transactions improperly reported on a tax return. With the net worth method, the government’s focus is on unreported income received by a taxpayer. With the expenditure or lifestyle method, the government attempts to establish a tax crime by showing that the cost of a taxpayers lifestyle exceeds the gross income reported during that same time period. The government employes the bank deposit method by using a formula to establish that the taxpayer’s taxable income and the actual amounts deposited into their bank accounts are inconsistent as the basis for charging the taxpayer with the commission of a tax crime.
The government may use any combination of the above methods as a way of presenting their case and to establish the existence of a tax crime to a judge or jury. It is critical that you hire competent counsel as early as possible. You need an attorney that will quickly assess the allegations and evaluate the evidence. You need an attorney with the skill to present counter arguments to negate the governments evidence. You need an attorney that knows how to explain and present valid and legal transactions that negate the evidence the government has against you. Mitigating factors are critical to the defense of any crime and exceeding technical in any tax related charge. Alexandra Eaker Pérez will assess your situation and work swiftly to minimizing damage and resolve your matter.
If you have been accused of a tax related crime, do not wait to obtain to obtain legal counsel that understands your case. Failure or delay in obtaining the right lawyer to defend you could result in an actual prison sentence. Alexandra Eaker Pérez will represent you at every stage of the criminal proceedings and work hard to protect you and your family.
At Eaker Pérez Law, we are ready to help you and your family with your criminal tax concerns. Put our experience in criminal tax defense to work for you. Contact Eaker Pérez Law, to see how we can help you and your family prosper.
Eaker Pérez Law has significant experience with IRS audits, including responding to summonses, resolving audits, representation during enforcement proceedings, negotiating settlements, filing appeals, and litigating tax positions in Federal Court.
Before you respond to a correspondence audit or meet with an IRS auditor, you should consult with an attorney to review your documentation and help prepare for the auditor’s questions.
Eaker Pérez has qualified attorneys who are ready to assist you with your IRS audit. If you think you can benefit from the services of Eaker Pérez please do not hesitate to contact us.
A tax lien is a legal claim by the government on a taxpayer’s current and future property. The IRS may place a tax lien on your property whenever the taxpayer has an outstanding tax bill with the government,. An IRS tax lien is a document filed with the county recorders office that is local to either you or the property or both. A tax lien may also be filed with the Secretary of State. A tax lien provides notice of the tax debt to the general public know of an unpaid tax debt to the federal government. Once the IRS files a Notice of Federal Tax Lien, the IRS completed a necessary step in the process that would allow the government to seize your property, along with your future assets. In California, the State Board of Equalization or BOE, Employment Development Department or EDD, and the Franchise Tax Board or FTB may file a tax lien against an individual or a business. A California tax agency has the ability to file multiple tax liens against both you and your business by filing a state tax lien at the local county recorders office, the California Secretary of State, and the county recorders officer where the property is located and may be recorded and filed by the State Board of Equalization, BOE, Employment Development Department, EDD, and the Franchise Tax Board, FTB.
The federal government may impose a federal tax lien only after the IRS assesses the tax through the formal tax assessment process, which provides the taxpayer with due process and judicial appeal rights. Congress requires the IRS to send a notice of a proposed tax assessment known as a Notice of Deficiency prior to assessing any tax deficiency prior to filing a federal tax lien. Once the IRS has assessed the tax against the taxpayer, all appeal rights have lapsed and gone unexercised, the IRS may file a tax lien against the taxpayer for any unpaid tax balances. The amount assessed on a tax lien will include all accrued penalties and interest on the date of the assessment. The tax agencies generally do not file an updated or corrected tax lien to reflect payments or a decreased tax balance. Tax agencies will generally only release a tax lien once the tax liability for all tax periods covered by the tax lien has been fully satisfied and resolved. Procedural mechanisms to resolve tax liens are complex and only available in limited circumstances.
A tax lien will impact your ability to buy and sell property, file bankruptcy, get a credit card, and lease property. Options are available but delay will limit the options available. Do not ignore a notice of a tax debt. Seek advice from trusted attorney experienced in resolving tax liens.
At Eaker Pérez Law, we are ready to help you and your business with your tax concerns. Put our tax litigation experience to work for you. Contact Eaker Pérez Law, to see how we can help you and your business prosper.