Income tax audits in California come from two main sources: those initiated by the State of California Franchise Tax Board (FTB), and those resulting from audits performed by another entity, such as the IRS. A term often used to refer to the latter type is a Piggy-Back Audit, which is a significant threat to California taxpayers. The key point to remember is that if the IRS audits you, you can usually expect a California FTB or other state agency audit to follow closely. This occurs because the IRS directly communicates with California tax agencies and vice versa. Any alterations to a California tax form are reported to the IRS by either the FTB, the Board of Equalization (BOE), or the Employment Development Department (EDD). Correspondingly, when an IRS audit concludes, the FTB, EDD, and other relevant state agencies are informed by the IRS.

It is important to be aware of these two main sources of income tax audits in California. This is particularly crucial as the completion of the initial audit opens up the possibility of a subsequent “piggy-back audit. Consequently, hiring a knowledgeable California tax attorney is highly recommended. In the course of any audit in California, the tax attorney must consider the implications of decisions made in the audit on potential future audits by other agencies like the IRS. The same considerations apply to an IRS audit, since any changes at the federal level correspondingly affect previously submitted California income tax returns.

Claimants beware, Californian individual and business taxpayers are more likely to be audited by a Californian agency such as the FTB or EDD due to recent budget and staffing reductions at the IRS. Therefore, if you receive an audit notice from the FTB or a business notification from the EDD for a misclassification audit or payroll tax audit, it is advised to hire an experienced tax attorney. A free consultation can provide detailed information on the audit process and advice on the necessary steps for self-protection. Finally, the attorney-client privilege provides a secure environment for candid discussions with your tax attorney.

For further inquiries or assistance related to audits from the EDD, one can reach out to their support team. You can visit eddcaller.com for more specific instructions on how to get ahold of edd customer service. They provide valuable guidance on how to traverse the complexities of audits and other tax-related matters, making them a reliable resource for taxpayers in California.