Owners of small, mid-sized, and large companies in the Los Angeles metro-area are particularly fortunate to live in one of the most prosperous areas in the nation. Los Angeles is home to not only a large and internationally recognized entertainment and film industry, but also an array of other commercial endeavors. The area is a major hub for commercial shipping and the importing and exporting of goods from and to Asia through the pots of Los Angeles and Long Beach – the two largest shipping ports in the nation. Furthermore, there is a sizeable defense and government contracting industry in and around Los Angeles. Business owners in the area have benefitted from the access to markets and infrastructure that makes this scale of trade and economic activity possible. These business owners are obligated to satisfy all tax obligations including their employment tax duty and their sales tax duty.
Unfortunately, some business owners in Los Angeles and throughout southern California fail to maintain their compliance with their tax obligations. For some business owners the failure to satisfy this duty stems from an earnest desire to catch-up and balance his or her business’ finances. For other business owners, the tax failure arises due to a mistaken belief that the IRS or California taxing agencies will not notice a single business’ noncompliance with its tax obligations. Unfortunately for noncompliant business owners, state and federal prosecutors aggressively pursue businesses and business owners who fail to satisfy their tax obligations. If you are concerned about past handling of payroll or sales tax obligations or have received an audit request, the Hoffman Tax Law Offices can help. To schedule a free and confidential consultation with an experienced tax lawyer call 800-897-3915 or contact us online today.
California Sales Tax Guidance & Audit Support
In California business owners are expected to account for, collect, and pay over the proper amount of sales tax for the particular locality. While the base sales tax rate is set by statute in California, the final amount paid at the point of sale can vary. This is because despite the base sales tax rate of 6.5% and a local tax rate of 1 percent, there is still variation imposed at other levels. Thus, the sales tax in Los Angeles is 9.0% while the sales tax rate in the state capitol, Sacramento, is set at 8.0%. Businesses must account for their location when determining the proper sales tax rate.
While many California business owners believe they are unlikely to face a sales tax audit, this is simply not true. Most California companies will indeed face a sales tax audit. In fact, the California BOE claims, “The program audits nearly one percent of active master accounts each year, concentrating on those considered most likely to be inaccurate in their tax reporting.” Thus business with particular risk factors, like excessive cash transactions or a history of productive audits, are more likely to face scrutiny. California business owners who may use a zapper or other device to commit sales tax evasion may be subject to criminal penalties for this action.
Business Owners Are Responsible for Federal & California Employment Tax Duties
Business owners are also required to account for, hold, and pay over federal and state payroll taxes. The California payroll tax obligation is administered by the state’s Employment Development Department. The federal payroll tax obligation is overseen by the IRS. For business owners ad responsible parties who fail to satisfy the federal employment tax obligation, particularly severe consequences can be imposed upon conviction. Under Section 6672 of the U.S. Tax Code “responsible parties” can be held personally liable for the company’s unsatisfied payroll tax obligation. Unpaid business payroll tax obligations are often significant and thus, the imposition of these liabilities are often catastrophic events for one’s personal finances. Unfortunately, the IRS is known to aggressively pursue the businesses and parties that permit these compliance failures to occur and persist.
Work With an Experienced Tax Attorney Regarding Employment Tax & Sales Tax Audits
If your company has worries or concerns over how a previous accountant or responsible party addressed payroll tax and sales tax obligations, the Hoffman Tax Law Offices can perform a meticulous review of past actions and filings. If you have already been contacted for a business tax audit, we can work to prepare your company and guide it through the audit process. To schedule a no-obligation, confidential sales tax audit or employment tax audit consultation call our firm at 800-897-3915 or contact us online.