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State & Local Tax Controversy
In addition to our practice in federal tax controversy, Ortiz & Gosalia, PLLC, offers legal counsel and representation with regard to Washington State and local tax planning and tax controversy. Our tax attorneys have post-doctorate degrees in tax law and years of experience assisting individuals and businesses located in, or otherwise connected to, the State of Washington.
Offices in Redmond, Bellevue and Kirkland, Washington.
State & Local Tax Planning
At Ortiz & Gosalia, PLLC, we advise small and mid-sized businesses regarding state and local tax compliance and tax planning issues. All of our attorneys have post-doctorate degrees in tax law and are experienced in advising clients on such issues. In addition to on-going consultations with businesses, we work with new businesses to ensure compliance with the various state and local taxing agencies with the goal of preventing future audits and potential assessments. If controversy arises, we also represent businesses before Washington State taxing authorities.
We welcome you to contact Ortiz & Gosalia with regard to your Washington State or local tax matter. Call us at (425) 633-2004, send an email to info@ortizgosalia.com, or use our online form. With Seattle area offices in Redmond, Bellevue and Kirkland, we serve clients throughout Washington State as well as those located internationally or in other U.S. states.
State & Local Controversy
State and local tax controversy (SALT) is an area of law that involves representation of clients before Washington State taxing authorities, such as the Department of Revenue (DOR), the Employment Security Department (ESD), and the Department of Labor & Industries (L&I). At Ortiz & Gosalia, PLLC, we have represented clients before all three taxing authorities and throughout all stages of a SALT case, including the audit, appeal, and collection stages.
It is important to understand that these agencies do communicate with one another, so that an audit by one agency will likely lead to an audit from one or more of the other agencies. The ESD and L&I work together to enforce Washington State law regarding how employers classify workers (either as employees or contractors). Washington State uses stricter guidelines as to the classification of such workers when compared to the federal guidelines. Thus it is important to understand how these rules work.
At Ortiz & Gosalia, our attorneys have experience handling cases before the above-mentioned taxing agencies at both the audit and appeal level. Our philosophy is to work closely with clients to evaluate the facts and legal arguments in an effort to prevent or reduce any potential tax assessment. It is important to understand that if relevant legal arguments and evidence are not timely raised and presented, then you may lose the right to raise these issues in a subsequent appeal. It is crucial that you seek the advice of a tax attorney or other tax professional.
We welcome you to contact Ortiz & Gosalia with regard to Washington State tax controversies. Call us at (425) 633-2004, send an email to info@ortizgosalia.com, or use our online form. With Seattle area offices in Redmond, Bellevue and Kirkland, we serve clients throughout Washington State as well as those located internationally or in other U.S. states.
Department of Revenue (DOR)
The DOR is primarily responsible for the collection of sales & excise taxes along with what is called the business and occupation (B&O) tax from Washington State businesses. Businesses located outside of Washington State that do business within the state may also be subject to these taxes. In order to determine if a nonresident business is subject to these taxes, a Nexus study must be completed. This study is used to determine whether a nonresident business has a filing requirement in the state, and thus whether the business may be subject to Washington State taxes.
If you receive notification of an audit by the DOR, you should immediately contact a tax attorney or other tax professional. Navigating an audit can be difficult, and without proper representation, it can potentially lead to larger tax assessments than would have otherwise occurred. Once an audit is complete, and should the outcome be unfavorable, then the client may file an appeal with the Appeal Division within the DOR. This is a critical step and it is strongly recommended that taxpayers seek the guidance of a tax attorney. The appeal provides an opportunity to present legal arguments and evidence before and an Administrative Law Judge (ALJ). Should the outcome of the appeal be unfavorable, you may then either request an Appeal Redetermination within the DOR or file an appeal with The Board of Tax Appeals.
To contact Ortiz & Gosalia with regard to Washington State Department of Revenue audits and controversies, call (425) 633-2004, send an email to info@ortizgosalia.com, or use our online form. With Seattle area offices in Redmond, Bellevue and Kirkland, we serve individuals and businesses throughout Washington State as well as those located internationally or in other U.S. states.
Employment Security Department (ESD)
The ESD is charged with collecting unemployment insurance taxes from Washington State businesses. Audits are typically performed by the ESD to determine whether a business is properly classifying its workers as employees or if they are being misclassified as contract labor.
The Washington State Legislature has outlined a stringent six-part test to determine whether a worker is an employee or a contractor (RCW 50.04.140). The result of this test is that it makes it difficult for a business to classify a worker as a contractor as opposed to an employee. In an audit, the ESD will require documentation on all contract labor and will make a determination as to whether such workers have been properly classified as such. If it is determined that workers have been misclassified, then the ESD will assess relevant taxes, interest, penalties and it is likely your unemployment insurance rate will increase.
If the findings of the audit are unfavorable, then you have the right to appeal the assessment before the Office of Administrative Hearings. This is an administrative hearing where legal arguments and evidence must be presented before an Administrative Law Judge (ALJ). Once the arguments have been made, the ALJ will issue a written determination as to his or her findings. If the outcome of this appeal is unfavorable, then you may file a Petition for Review with the Commissioner of the Employment Security Department. Should you disagree with the Commissioner’s findings, you may file an appeal with the Washington State Superior Court.
To contact Ortiz & Gosalia with regard to Washington Employment Security Department audits and assessments, call (425) 633-2004, send an email to info@ortizgosalia.com, or use our online form. With Seattle area offices in Redmond, Bellevue and Kirkland, we serve individuals and businesses throughout Washington State as well as those located internationally or in other U.S. states.
Department of Labor & Industries (L&I)
The Department of Labor & Industries is responsible for collecting industrial insurance premiums from businesses. Generally, when an audit is conducted, the auditor will look to see if workers have been properly classified as employees or if they have been misclassified as contractors. If there have been any misclassifications, then L&I will assess payments for industrial insurance premiums along with interest and penalties.
If the audit findings are unfavorable, you may then either file for a Redetermination with L&I or file an appeal with the Board of Industrial Insurance Appeals (BIIA). This is an administrative hearing where legal arguments and evidence must be presented. Should the outcome of this appeal also be unfavorable, you may then file a request for review before the full BIIA panel, or you may file a petition with The Washington State Superior Court.
To contact Ortiz & Gosalia with regard to Washington Department of Labor & Industries audits and assessments, call (425) 633-2004, send an email to info@ortizgosalia.com, or use our online form. With Seattle area offices in Redmond, Bellevue and Kirkland, we serve individuals and businesses throughout Washington State as well as those located internationally or in other U.S. states.
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