A tax audit rarely arrives as a surprise to those who have been waiting for one, and it almost always arrives as a shock to those who have not. In either case, the response should be the same: deliberate, documented, and never improvised. For more than forty years, our firm has represented individuals and businesses in examinations ranging from a single-issue correspondence audit to a multi-year field examination involving partnerships, real estate, and offshore reporting.
We come to audits as tax lawyers, not as advocates assembled at the last minute. That distinction matters: by the time most matters reach us, half of what determines the outcome is already in the file. Our job is to read that file clearly, identify what the agent is truly seeking, and respond with documentation that closes issues rather than opening new ones.
What an examination actually looks like
Most clients have never been through an audit and arrive imagining something far more adversarial than the process usually is. In practice, an audit is a structured conversation: the agent has questions, the taxpayer has documents, and the file moves toward closure as each line item is reconciled. The risk is not the conversation itself but the absence of preparation. An offhand answer in an opening interview can reshape the entire scope of the examination, and a poorly organized records production can suggest weakness where none exists.
We typically begin by interposing ourselves as the sole point of contact with the examiner. Clients no longer answer the phone, no longer receive surprise visits, and no longer wonder whether something they said in passing will be repeated in a revenue agent's report. We translate the agent's information document requests into precise document productions, and we draft narrative memoranda when the law requires explanation rather than paper.
Federal, state, and local examinations
Our audit practice spans every taxing authority a California client is likely to encounter. We routinely handle IRS examinations of Form 1040, Form 1120-S, Form 1065, and Form 1041 returns; Franchise Tax Board residency and apportionment audits; CDTFA sales-and-use tax audits, including challenges to seller's permit revocations and successor liability; and Employment Development Department worker-classification disputes where the boundary between contractor and employee is in question.
Local property-tax examinations—particularly those involving Proposition 13 change-in-ownership questions—occupy a meaningful portion of our docket. The county assessor's office operates under different rules than the Franchise Tax Board, and the strategy for resolving an assessment dispute looks very little like a federal income tax audit. We tailor our approach to the agency, the facts, and the client's longer-term position.
Appeals, settlement, and litigation
Not every audit closes at the agent level, and not every adverse finding should be accepted. When the examiner's position is wrong on the law or unsupported by the record, we draft a protest and take the matter to the IRS Office of Appeals or, in California, to the Office of Tax Appeals. These forums offer something the examination level rarely does: a settlement officer who weighs hazards of litigation and is empowered to compromise.
Where settlement is impossible or unwise, we file petitions in the United States Tax Court, and we have litigated cases through trial and post-trial briefing. Our willingness to litigate, when warranted, is one of the reasons most of our matters resolve before they reach that stage. Government counsel respond differently to a represented taxpayer who is genuinely prepared for trial than to one who is hoping to be done.
Quiet representation, principled outcomes
Audits are stressful. They intrude into family life, business operations, and the simple sense that one's affairs are in order. Much of what we do is therefore not strictly legal: we explain what is happening, predict what will happen next, and remove the uncertainty that makes the process so difficult. The legal work is essential, but the calm it produces is the outcome our clients remember.
A California professional received a Notice of Proposed Assessment from the Franchise Tax Board asserting non-resident status had been improperly claimed across three years. We assembled the residency record, drafted a protest, and ultimately resolved the matter at appeals with no change to the original returns and no penalty exposure. The matter never required litigation, but it was prepared as if it would.
If you have received an examination notice—or you suspect one may be coming— the right time to call is now, before the first response is sent. Early engagement nearly always shortens the matter and improves the result.