Understanding California Tax Laws and Related Law Issues

Whether people are dealing with taxes as individuals or as business people, they know that, sometimes, these laws are so complex that they can get into trouble. Tax laws and other laws regarding financial matters may vary from place to place, depending on the country and state in which the person lives. This article will deal with tax laws and other financial laws as they pertain to the State of California. Understanding these laws will keep a person from getting into a lot of financial legalities with the government and other officials.

Why It Is Important to Consult with Legal Professionals Regarding Tax Laws

A time may come where an individual may receive notification that he or she is going to be audited by the state or federal government. That may be the time to consult with a legal professional, such as Brotman Law, located in Southern California. The attorney will be able to help the individuals find any loopholes in the law that may help them with their tax audit. The attorney or law firm can help individuals navigate through the rough process of an income tax audit, helping them to avoid stiff penalties. The attorney or law firm can also help them find tax shelters that can help them in the future to manage their finances wisely.

What a Taxpayer in California May Want to Know about an Audit

A taxpayer in California may be interested to know that the statute of limitations for the government collecting any additional taxes because of an audit is four years from the date of the original due date. However, if the taxpayer did not file a tax return for the year in question, the statute of limitations does not apply, and the government can proceed with its request. The results of the audit will determine if there has really been an overpayment or a penalty due because of an erroneous tax return. The government will send a representative to go over documents with the taxpayer, but the individual can have his or her representative to assist.

Other Audits That May Be Conducted

Besides the income tax audit, there may also be payroll tax audits, sales tax audits, and other questions about financial transactions, particularly in business. The intent is to ensure that all financial statements are presented in a fair state as consistent with the Generally Accepted Accounting Principles. Such statements and transactions are managed by the state auditor, in the case of this article, the state auditor of California. Ensuring that individuals and businesses comply with the state’s tax laws is something that could be better handled by the individual’s or business owner’s tax representative. This could be an accounting professional or a legal professional experienced in business and tax law.

A Closer Look at Tax Debt

The Internal Revenue Service has 10 years to collect on a tax debt while the government at the state level will have 30 years or more. As frightening as this sounds, a legal tax professional can help clients to reach a fair settlement with the government agency in question. Sometimes, the government agency will agree to a settlement for pennies on the dollar, depending on the severity of the case and the individuals involved. Because the government insists on being paid first before any other financial transactions take place, it may take a tax lawyer to work out the details to satisfy both the government and the individual or business client.

If the Taxpayer is Charged with Criminal Tax Matters

If an individual or business entity has been charged with a criminal matter regarding taxes, this is a rather serious offense and must be addressed carefully. The United States government reports a 92 percent conviction rate for matters presented against taxpayers for criminal tax matters. Criminal tax matters tend to get very complex, and it will take someone who has experience with successfully litigating these matters to help the taxpayer. Hiring a tax attorney may become expensive on one end, but will pay off for the taxpayer in the long run.

International Tax Issues

International tax issues can be particularly perplexing because the taxpayer is dealing with legal issues with more than one country. If not handled properly, the taxpayer could end up paying through the nose to more than one country, and it is possible that this could have been avoided. The more business dealings a person has overseas or in another country, the more important it is for him or her to have sound financial records. A tax attorney experienced in international business law will be very helpful for the individual.

Tax Laws and Divorce

Another issue where people may run into legal trouble regarding taxes is when they are going through a divorce. Because the two parties involved are mostly at odds with one another, getting them to agree on matters regarding tax liabilities will be extremely difficult. At such times, having a lawyer or law firm with experience resolving divorce issues when it comes to taxes is paramount. It is definitely not a time for the individual to try to navigate the issues alone. People involved in divorce proceedings would do well to have their own tax lawyer. Often, women who are getting a divorce decide to change their name back to their maiden name, and they might also decide to change their children’s surname. If you want to learn how to change your name in California, it’s also recommended that you seek help from professionals. 

Final Thoughts about Tax Laws in California

Whether the issue is income taxes, taxes incurred because of going through a divorce, international tax laws, or laws related to criminal tax matters, the individual surely realizes that taxes are a part of everyday life. It is impossible to escape tax liabilities and assessments. The smartest thing for individuals to do is to have a lawyer on retainer to help them when such issues come up with taxes. The tax lawyer, along with accounting professionals, can help to keep clients in legal compliance where matters of finances are concerned. As it has been said, an ounce of prevention is worth a pound of cure when it comes to handling tax matters.

Interesting Related Article: “Everything You Need to Know About Filing Your Taxes