Tax Attorney in California

Yes. California has a graduated personal income tax from 1 percent up to 13.3 percent (the top bracket includes a 1 percent Mental Health Services Act surtax under Cal. Rev. & Tax. Code §17043 that applies above $1 million of taxable income). With the State Disability Insurance wage cap removed effective 2024 under SB 951, an additional uncapped 1.1 percent SDI applies, making the all-in California marginal hit on high-wage earners 14.4 percent. The corporate franchise tax is 8.84 percent under Cal. Rev. & Tax. Code §23151 (10.84 percent for financial corporations).

The U.S. Tax Court holds trial sessions in five California cities: Los Angeles (Edward R. Roybal Federal Building, 255 E. Temple Street), San Francisco, San Diego, Sacramento, and Fresno. A petitioner identifies the preferred place of trial on the petition under Tax Court Rule 140. Southern California cases typically calendar to Los Angeles or San Diego, Central Valley cases to Fresno, Bay Area cases to San Francisco, and Northern California cases to Sacramento.

Two periods matter. For FTB assessment, Cal. Rev. & Tax. Code §19057 generally gives the FTB four years from a filed return to assess, with no statute on unfiled returns. For FTB collection, §19255 gives the FTB 20 years from the latest of assessment, due date, or final return filing. CDTFA assessment runs three years under §6487 (eight for unfiled or fraud), with collection generally 10 years under §6711. EDD has its own windows under the Unemployment Insurance Code. The federal IRS CSED of 10 years under IRC §6502 runs separately from all of these.

Yes. The IRS examines federal income tax under the Internal Revenue Code; the FTB examines California state income tax under the Revenue and Taxation Code. The two agencies operate independent audit programs but share information through formal information-exchange agreements. An IRS adjustment to federal taxable income is reported to the FTB under the federal-state agreement, and a Revenue Agent Report can trigger a parallel California assessment within four years. CDTFA sales-tax audits and EDD payroll audits can run alongside both. The same year can therefore be open in four different forums simultaneously.

Yes — three of them. FTB compromise authority sits at Cal. Rev. & Tax. Code §19443 (filed on FTB Form 4905 PIT for individuals or 4905 BE for entities). CDTFA operates a parallel offer program for sales-and-use tax. EDD compromise authority sits at Cal. Unemp. Ins. Code §1192 for payroll-tax liabilities. Each program has its own form, financial disclosure standard, and review path. Submitting an FTB OIC does not affect a federal IRS OIC — the two are evaluated by separate teams under different RCP standards, and California is generally tougher on primary-residence equity than the IRS is.

Your federal CSED is calculated from the date of assessment, which appears on your IRS Account Transcript as Transaction Code 150 (return filed) or Transaction Code 290 (additional assessment). Add ten years under IRC §6502, then add days for tolling events (pending OICs, CDP hearings, bankruptcy stays, and so on). The IRS publishes the CSED on its internal CC ACTRA transcript; we pull this as part of every California engagement. The California 20-year statute under Cal. Rev. & Tax. Code §19255 runs independently — an FTB liability does not expire when the federal CSED runs.

Probably yes, on both sides. Federal IRC §6672 assesses a Trust Fund Recovery Penalty against any "responsible person" who "willfully" failed to pay over withheld taxes — the FICA and federal income-tax withholding portion of Form 941, not the employer's share. The IRS conducts a Form 4180 interview to identify responsible persons. Anyone with check-signing authority, payroll-decision authority, or knowledge of unpaid taxes can be assessed. On the California side, Cal. Unemp. Ins. Code §1735 assesses personal liability for EDD payroll-tax withholding (SDI, PIT withholding) against the same class of responsible persons. CDTFA sales-tax personal liability under Cal. Rev. & Tax. Code §6829 operates under similar principles.

Often yes, for some period of time. California uses the domicile test at Cal. Rev. & Tax. Code §17014, fleshed out in FTB Publication 1031, which weighs nine factors: time in state, location of family, location of primary residence, where you hold a driver's license, where you register vehicles, where you vote, where you bank, where you maintain professional licenses, and where you have business or social ties. The FTB pursues departing residents — especially those moving to Nevada, Texas, Florida, or Washington — on a theory that the move was incomplete or pretextual. A clean break documented at the time of the move is the strongest defense. We see FTB residency audits run two to three years after the move.

Yes. IRC §7345 authorizes the IRS to certify "seriously delinquent" federal tax debt — currently $62,000 for 2026, indexed for inflation — to the State Department, which may then deny passport renewal or revoke an active passport. Certification reverses when the debt is paid, an IA is in place, an OIC is accepted, an active CDP hearing is pending, or Innocent Spouse Relief is in process. The California FTB does not certify to the State Department, but FTB liabilities can independently trigger driver's-license suspension under Cal. Veh. Code §13205 in some circumstances.

Federal tax-resolution fees vary by matter complexity. A straightforward Installment Agreement typically falls between $1,500 and $3,500. A full Offer in Compromise with Form 433 financial analysis runs $4,000 to $7,500. Audit defense depends on the audit type and the number of issues. A U.S. Tax Court petition with case workup and trial preparation generally starts at $6,000 and rises with complexity. California-state matters (FTB, CDTFA, EDD, OTA) are priced separately. VTL provides a written fee quote after the free consultation. Cal Bar Rule 7.1 prohibits comparisons claiming we are cheaper or faster than competitors without verifiable substantiation, so we do not market on price.

Yes. Communications between you and a California-licensed attorney for the purpose of seeking legal advice are protected by California Evidence Code §954 attorney-client privilege and the parallel federal common-law attorney-client privilege, subject to the usual exceptions (crime-fraud, waiver). The narrower federally-authorized tax practitioner privilege under IRC §7525 applies to non-attorney CPAs and EAs but does not extend to criminal-tax matters. An attorney handling your tax case retains the broader privilege that survives criminal investigation.

A Tax Court trial is a bench trial — no jury — before a Judge or Special Trial Judge of the U.S. Tax Court, held at the Edward R. Roybal Federal Building at 255 E. Temple Street in downtown Los Angeles. The session opens with calendar call where the Court hears scheduling issues. Most cases on the calendar settle before trial; the IRS Office of Chief Counsel attorney meets with petitioner's counsel during the days before trial. If trial proceeds, the petitioner generally bears the burden of proof, presents evidence and witness testimony, and the Court issues a written opinion typically within several months of trial. Small-tax-case procedure under IRC §7463 applies to deficiencies of $50,000 or less per year and uses a simplified evidentiary standard.

Yes, generally. IRC §6331(k)(1) suspends federal levy action while an OIC is pending and for 30 days after a rejection, and during any timely-filed Appeals review of a rejection. The IRS will not levy on you while a processable OIC is being evaluated. However, the IRS may still file a Notice of Federal Tax Lien during OIC pendency to protect its position. CSED is also tolled during pendency. A poorly-prepared OIC that gets returned (not rejected) does not provide the same protection — processability matters. The FTB has parallel pending-offer rules, but the protections are not identical to the federal side.

The Office of Tax Appeals (OTA) was created in 2018 under AB 102 to hear appeals from FTB, CDTFA, and EDD final-action determinations. OTA replaced the State Board of Equalization's prior tax-appeal jurisdiction for income, sales, and payroll taxes. Three-judge panels of Administrative Law Judges hear cases; decisions are precedential and published at ota.ca.gov. The appeal window is generally 30 days from the FTB Notice of Action, 30 days from a CDTFA redetermination, or as specified by EDD. Hearings are held in Los Angeles, Sacramento, and Fresno. OTA decisions are subject to judicial review in California Superior Court.

IRC §280E disallows ordinary business deductions for any business trafficking in a Schedule I or Schedule II controlled substance — even one licensed under California law. The defense is cost-of-goods-sold treatment under Treasury Regulation §1.471-3, which is allowed because COGS is not a deduction but a reduction of gross income. Inventory accounting under IRC §471 becomes the lever. We work with operators to document inventory cost capitalization carefully, prepare for the inevitable IRS audit, and coordinate with the CDTFA on cannabis excise tax under Cal. Rev. & Tax. Code §34010. California also passed AB 195 in 2022 to reduce some state-tax burden on cultivators — the federal §280E disallowance remains.

AB 5 (effective 2020) codified the ABC test from the Dynamex decision into Cal. Lab. Code §2775. To classify a worker as a 1099 contractor in California, the hiring entity must show that (A) the worker is free from control and direction, (B) the work falls outside the usual course of the hiring entity's business, and (C) the worker is engaged in an independently established trade. EDD audits use this framework. A reclassification can produce back UI, ETT, SDI, and PIT withholding for three years, plus penalties under Cal. Unemp. Ins. Code §1126 and interest. Prop 22 carved out app-based drivers; other industries (trucking, real estate, healthcare, journalism) have statutory carve-outs at §2775 et seq. The defense is exemption analysis and ABC-test documentation.

No. California has no state estate tax and no state inheritance tax. The state estate tax was repealed in 2005 when the federal credit for state death taxes was phased out. Federal estate tax under IRC §2001 still applies above the federal exemption ($13.99M per person for 2025, scheduled to drop after 2025 under TCJA sunset). Prop 19 (effective 2021) restructured the California property-tax base-year-value transfer rules for parent-to-child and grandparent-to-grandchild transfers under Cal. Const. Art. XIII A, which is a property-tax issue, not an estate-tax issue — but it affects estate planning materially.

California's state base sales-and-use-tax rate is 7.25 percent (the highest base rate in the country). Local district taxes add up to another 3.5 percent, producing combined rates of 7.25 percent to 10.75 percent depending on jurisdiction. Los Angeles County is at 9.5 percent; Alameda County hits 10.25 percent in some cities; the City of Los Angeles itself runs at 9.5 percent. Collection and administration belong to the CDTFA under Cal. Rev. & Tax. Code Part 1. Use tax applies to out-of-state purchases at the same rate when sales tax was not collected. CDTFA audits look at mark-up methodology, observation tests, and POS reconciliation, and can scale a test-period error across the whole audit period if not challenged early.

No. The firm is headquartered at 1100 S. Robertson Boulevard in Los Angeles, but we represent clients throughout California — from San Diego to Sacramento, San Francisco to Fresno, and across all 58 counties. Most engagements run by phone, secure portal, and email. In-person meetings happen by appointment at the LA office for clients who prefer face-to-face. We appear at FTB, CDTFA, EDD, OTA, and U.S. Tax Court venues throughout California as case calendaring requires — including Tax Court sessions in San Francisco, San Diego, Sacramento, and Fresno when that is the closer place of trial for the client.