Tax Law Frequently Asked Questions
The questions below are the ones we hear most often in initial calls. The answers reflect current federal and California law and our experience handling these issues for clients across the state.
General Tax Questions
Do I need a tax attorney or a CPA?
CPAs are typically the right choice for tax preparation, accounting, and routine planning. Tax attorneys are the right choice for IRS controversy work, criminal exposure, complex transactions, and matters requiring attorney-client privilege. Many cases benefit from both working together.
How much do tax attorneys cost?
Engagements vary widely. Routine penalty abatement may be a few hundred dollars in a flat fee. Offer in Compromise representation typically runs in the low thousands. Complex audits, Tax Court litigation, or business tax disputes can range higher. Valley Tax Law provides flat-fee quotes after the free case review and before engagement.
How long does the IRS have to collect a tax debt?
Generally 10 years from the date of assessment under IRC Section 6502. The statute can be tolled by Offer in Compromise filings, collection due process appeals, bankruptcy filings, and certain other events. The actual remaining statute is shown on IRS account transcripts.
Can the IRS take my house?
Yes, but only after issuing required notices, providing Collection Due Process rights, and obtaining court approval for principal residence seizures under IRC Section 6334(e). Principal residence seizure is rare and usually preventable through proactive resolution.
What is the difference between a tax lien and a tax levy?
A lien is a legal claim attaching to property; a levy is an actual seizure. Liens generally come first and protect the government's interest. Levies follow when collection alternatives are not in place.
Will the IRS forgive my tax debt?
Through an Offer in Compromise, the IRS settles for less than full payment in qualifying cases. Through the collection statute expiration, debts older than 10 years become uncollectible. The IRS does not "forgive" debt outside of these statutory mechanisms.
Audit Questions
What are my odds of being audited?
For most individuals, less than 1 percent annually. Audit rates increase with income level, with self-employment income, with home office deductions, with rental property activity, and with international income. Information return mismatches also commonly trigger automated CP2000 examinations.
How far back can the IRS audit?
Three years from filing for most returns. Six years if more than 25 percent of income was omitted. Unlimited if the return was fraudulent or not filed at all.
Should I represent myself in an audit?
For correspondence audits with clear documentation, often yes. For office or field audits, or for any audit with substantive disputes, representation generally pays for itself in reduced adjustments and avoided procedural mistakes.
California Tax Questions
What is the difference between FTB, CDTFA, and EDD?
FTB administers California income tax. CDTFA administers sales and use tax and various excise taxes. EDD administers payroll taxes for unemployment, disability, and state income tax withholding. All three can audit and collect.
Does an IRS Offer in Compromise resolve California tax debt?
No. State tax debts must be resolved separately. California has its own OIC program, with similar but not identical requirements. We often handle federal and state resolutions in parallel.
Why people call us first
Get a free tax debt action plan. Built by experts. Yours to keep.
Most tax-relief companies use the consultation as a sales pitch. We use it to give you something concrete: a clear, prioritized plan for your specific case, ready to execute with or without our involvement.
- You speak with experts, not salespeople. Our resolution team has worked thousands of IRS and state tax cases across the United States. They know which questions matter.
- You leave with a written action plan. Not a vague pitch. Specific steps tailored to your facts: which IRS program fits, what to file, what deadlines apply, what to expect.
- The plan is yours, no strings attached. Use it on your own. Take it to another firm. Hire us to execute it. There is no obligation, ever.
- If we cannot help, we tell you. Not every case is right for our firm. When that happens, we point you toward the right resource instead of taking your money.
Get your free tax debt action plan. Yours to keep, with or without us.
15 minutes with our tax debt resolution team. A concrete plan tailored to your specific case. No obligation, no pressure, no sales reps.