A Guide for CPAs Navigating Complex Government Tax Audits
Protecting Your Client Relationships. Reducing Exposure. Expanding Value.
As a CPA, you’re often the first line of defense when a client receives an IRS, EDD, CDTFA, or CBP audit notice. While your team is focused on clean financials and accurate filings, government audits can expose your firm, and your broader client base, to risk if not handled properly. That’s where Milikowsky Tax Law comes in.
Why CPAs Partner with MTL
1. We Don’t Do Taxes, We Defend Business Owners
We’re not here to compete for your clients. We don’t prepare tax returns.Our sole focus is defending businesses in complex federal and California state audits, including:
- IRS income tax audits
- EDD payroll tax audits
- CDTFA sales and use tax audits
- CBP customs and tariff audits
We partner with CPAs to protect what matters most: your client relationships, your reputation, and your firm’s exposure.
2. Reduce Risk Across Your Client Base
A poorly handled audit in one case can open the door to scrutiny across multiple accounts. By referring audit defense to MTL, you:
- Limit liability by keeping your firm out of legal advocacy
- Avoid conflicts of interest during investigations
- Keep clients informed and protected through clear legal representation
- Prevent auditor overreach that could impact other filings you’ve prepared
We’re not just defending one audit, we’re protecting your entire book of business.
3. Monthly CPA Education Events: Stay Ahead of Government Enforcement
Milikowsky Tax Law hosts monthly live education sessions in Encinitas, designed specifically for CPAs navigating the growing complexity of government tax enforcement. These events provide timely, actionable guidance from legal experts who work daily with IRS, EDD, CDTFA, and CBP auditors.
Streaming access will be available starting Q3 2025.
Each session focuses on real-world audit risks and legal trends affecting your clients, with time for Q&A and professional networking.
Topics We Cover:
- CBP Audits and Tariff Compliance
U.S. Customs and Border Protection is intensifying audits on imported goods. We break down:
- How HTS misclassification exposes businesses to penalties
- When tariff costs can and cannot be treated as COGS
- What documentation creates a defensible audit trail
- How brokers and CFOs can minimize audit risk without disrupting operations
- California Sales Tax Audits (CDTFA)
With California aggressively pursuing unpaid sales and use tax, especially in cash-heavy industries, our sessions examine:
- CDTFA audit triggers and red flag ratios
- Proper documentation for resale and exemption certificates
- How to prepare for an on-site audit and what auditors look for
- The appeals process when audit results are inaccurate or excessive
- SBA PPP Loan Forgiveness Appeals
For businesses facing denial of PPP forgiveness, we explain how to:
- Appeal through the SBA Office of Hearings and Appeals (OHA)
- Document economic necessity and compliance with loan terms
- Protect owners from clawback efforts or fraud accusations
- Coordinate legal strategy with CPAs for smooth resolution
- Criminal Tax Investigations and Audit Referrals
Not all audits are civil. Learn how CPAs can identify when a case is being referred to the IRS Criminal Investigation Division and:
- What triggers a criminal referral (whistleblowers, SARs, BSA data)
- The role of CPAs as potential witnesses or targets
- How to safeguard the CPA-client relationship under privilege constraints
- When to bring in a tax attorney before engagement escalates
- EDD Employee Misclassification Audits
California’s employment tax enforcement remains aggressive post-AB5. In these sessions, we explore:
- How to analyze contractor vs. employee status under EDD standards
- Industries at high risk (construction, logistics, creative services)
- How audit findings can trigger retroactive liability and IRS exposure
- Best practices for documentation and engagement contracts
These sessions are designed to empower CPAs, not only to defend their clients but to identify risks early, reduce liability, and enhance the value they bring to each engagement.
Upcoming sessions, registration details, and streaming info will be available on our website.
4. We Respect the CPA Relationship
When you refer a client to MTL:
- You stay in the loop throughout the process
- We never cross lines, we don’t offer tax preparation, bookkeeping, or compete for advisory services
- We elevate your value to the client by helping them survive complex audits with minimal disruption
Your reputation stays intact. Your client stays protected. And your firm avoids risk.
How to Work with Us
- Refer Clients When Facing an Audit
We work directly with your client and include you in strategic discussions. - Join Our CPA Education Series
Attend in-person sessions or register for Q3 streaming access. - Connect With Us for On-Demand Guidance
Need a quick consultation or want a second opinion? Reach out, we’re here.
