Tax Attorney in Costa Mesa, California

The closest IRS Taxpayer Assistance Center is in Santa Ana at 801 W Civic Center Drive, about a 12-minute drive from downtown Costa Mesa. The Franchise Tax Board field office is at 600 W Santa Ana Boulevard, Suite 300, also in Santa Ana. Both require an appointment. The CDTFA Irvine field office closed on November 27, 2024, so sales and use tax appointments have shifted to the Cerritos office at 12750 Center Court Drive South or the Diamond Bar district office. We attend these appointments on a client's behalf under federal Form 2848 and FTB Form 3520-PIT or 3520-BE so the taxpayer does not have to walk in personally.

Cash payments from Vans, Volcom, Hurley, RVCA, or any other Costa-Mesa-headquartered sponsor are Form 1099-NEC compensation reportable on Schedule C as self-employment income, subject to federal income tax, 15.3% SE tax under IRC §1401, and California income tax up to 13.3% under R&TC §17041. Product (boards, decks, apparel) is taxable at fair market value when received. After three years of net losses the IRS can recharacterize the activity as a §183 hobby and disallow deductions. We structure these earnings through an S corporation or qualified entity so a portion is W-2 wages and the rest a distribution, and we keep a contemporaneous expense log (travel, entry fees, training, video) that holds up on §183 audit.

Costa Mesa has a base statewide sales and use tax of 7.75% under R&TC §6051 and the local Bradley-Burns add-ons. South Coast Plaza tenants frequently misapply the rate when they ship from store to an out-of-area address, when a delivery touches a different ZIP with a different rate, or when point-of-sale software defaults to the store's billing rate instead of the destination rate. CDTFA's Audit Manual flags large-volume retail tenants for rotational audits, and a single misconfigured POS can compound to a six-figure deficiency over a four-year statute. We respond to CDTFA Form 526 and 1296 notices, negotiate the audit scope, and pursue Office of Tax Appeals review under R&TC §6561 when the audit assessment is wrong.

Under Watson v. Comm'r (8th Cir. 2012) and IRS Fact Sheet 2008-25, an S-corporation shareholder-employee must take a salary that reflects services performed before taking distributions. The IRS reclassifies distributions as wages when the salary is unreasonably low, triggering FICA, Medicare, federal unemployment tax, plus the §6651 failure-to-deposit penalty. We pull a reasonable-comp study using RCReports or a comparable methodology benchmarked against OC-Metro service-sector wages, file amended Form 941 returns where needed, and respond to the IRS Letter 950 or FTB Notice of Proposed Assessment under R&TC §19031 with documentation that supports the salary level.

The regular Assessment Appeals Board filing window for the annual tax roll opens July 2 and closes November 30 each year under R&TC §1603. For Supplemental Assessments (reassessments after a change of ownership or new construction) and Escape Assessments (catch-up assessments on previously unreported value), you have 60 days from the date printed on the notice. Applications go to the Clerk of the Board at 400 W Civic Center Drive, Santa Ana. We file on Form BOE-305-AH with the comparable-sales workup, attend the AAB hearing in Santa Ana, and where the AAB denies relief, file a refund action in Orange County Superior Court under R&TC §5141 within six months.

Costa Mesa Municipal Code Chapter 3-58 imposes an 8% Transient Occupancy Tax on any stay of 30 consecutive days or fewer at any hotel, motel, or short-term rental. The operator must register with the Finance Department for a Transient Occupancy Registration Certificate, collect the TOT at the time rent is paid, and remit quarterly. Airbnb does not collect Costa Mesa TOT for every listing, so the host is liable for any uncollected amount, plus penalties and interest. Separately, Airbnb issues Form 1099-K above the federal reporting threshold, which the IRS cross-references against Schedule E or Schedule C rental income. We handle TOT back-tax disputes with City Finance and the corresponding federal and FTB rental-income matters.

Experian's North America headquarters is in Costa Mesa, and many employees hold restricted stock units and incentive stock options. RSUs vest as W-2 wages at fair market value on the vesting date and are sourced to California for any portion of the vesting period you worked in California, even if you move out of state. ISOs trigger the alternative minimum tax under IRC §55 on the spread at exercise unless you make a §83(b) election within 30 days of grant. California conforms to the federal AMT under R&TC §17062. We coordinate the federal Form 6251 AMT computation, Schedule D capital-gain treatment on the eventual sale, and the FTB Schedule CA(540) adjustment for non-conforming items.

An FTB Notice of Proposed Assessment under R&TC §19033 gives you 60 days from the notice date to file a written protest with FTB. Miss that window and the NPA becomes a Notice of Action, which then triggers a separate 30-day window to appeal to the California Office of Tax Appeals under R&TC §19324. The OTA hearing for Costa Mesa taxpayers is held at the Los Angeles hearing site or via virtual hearing. After OTA, the next step is a refund-suit action in California Superior Court under R&TC §19382. We file the protest, request the audit file under the California Public Records Act, and prepare the OTA opening brief on the timeline.

Yes, by ten years. The federal IRS collection statute under IRC §6502 is ten years from the date a tax is assessed. California's collection statute under R&TC §19255 is twenty years from the latest assessment, lien, or other action that revives the period. A federal liability can lapse at the same time a parallel California liability still has a decade of life left. The same is true for EDD payroll-tax liabilities under UIC §1132 and CDTFA sales-tax liabilities under R&TC §6711. Planning for a Costa Mesa client always considers both timelines, because a federal Offer in Compromise that resolves the IRS side has no effect on the FTB balance unless we file a separate FTB OIC under R&TC §19443.

Yes. The United States Tax Court has five California trial cities: Los Angeles, San Diego, San Francisco, Sacramento, and Fresno. Costa Mesa cases are heard at the Los Angeles trial session at 300 N Los Angeles Street. You have 90 days from the date of an IRS Notice of Deficiency under IRC §6213(a) to file a Tax Court petition (150 days if you are outside the U.S.). For federal tax-refund actions and tax-related criminal matters, jurisdiction lies with the U.S. District Court for the Central District of California, Southern Division, at the Ronald Reagan Federal Building, 411 W 4th Street, Santa Ana. Appeals run to the 9th Circuit.

Costa Mesa Municipal Code Title 9 requires every person engaged in business in the city to obtain a business license, including home-based businesses. The current schedule ranges from approximately $25 to $200 based on gross receipts, and the city is studying an increase. The license is separate from your DBA, your California Secretary of State LLC registration, the §17942 $800 annual LLC franchise tax to the FTB, and the federal Schedule C or 1120-S filing. A home-based consultancy also has to file a Home Occupation Permit. We handle business-license back-tax notices from Costa Mesa Finance and the corresponding FTB and IRS exposure when those filings have been missed.

Under IRC §6672, any person responsible for collecting and paying over withheld payroll taxes who willfully fails to do so is personally liable for 100% of the unpaid trust-fund portion. The IRS calls this the Trust Fund Recovery Penalty. It pierces the corporate or LLC veil and reaches the owner, signers on the bank account, and sometimes the bookkeeper. California has a parallel personal liability under UIC §1735 for EDD payroll taxes. Both run concurrently with a Form 941 deficiency to the business. We respond to the IRS Letter 1153 and Form 4180 interview, contest the responsible-person finding, and where the liability is correct, negotiate an installment agreement or Offer in Compromise that protects the personal assets.

Yes. R&TC §17014 defines a California resident as anyone in the state for other than a temporary or transitory purpose, plus anyone domiciled in California who is outside the state for a temporary or transitory purpose. The Appeal of Stephen Bragg (2003-SBE-002) gives the FTB and the OTA 19 factors to weigh, including where your principal residence is, where your spouse and minor children live, where your professional licenses are issued, where your driver's license is registered, where your physician and dentist are, where your safe deposit box is, and where your golf-club memberships are. A move out of Costa Mesa to Nevada, Texas, or Florida without breaking the ties listed in Bragg keeps you on the hook for California tax. We build the residency-change file before the move and defend the FTB audit if one opens.

Under 49 USC §40116, flight crewmembers (pilots, flight attendants) who perform more than 50% of their duties in a state are taxable as residents of that state, regardless of where they live. If you live in Costa Mesa and base out of John Wayne (SNA) but fly mostly transcontinental, California still taxes the residence portion under R&TC §17014, and the federal pre-emption gives you state-of-residence treatment if no single state has 50% of your duty time. We coordinate the federal §40116 allocation, the FTB Schedule CA(540) nonresident allocation if applicable, and any out-of-state credit under R&TC §18001.

Yes. We file the BOE-305-AH application with the Clerk of the Board at 400 W Civic Center Drive, Santa Ana, prepare the comparable-sales workup or income-approach valuation, brief the hearing, and appear at the Orange County AAB on the taxpayer's behalf under R&TC §1603. The AAB has two-year statutory authority to decide. If the AAB issues an adverse decision, we file a refund suit in Orange County Superior Court within six months under R&TC §5141, and from there the case can be taken up to the California Court of Appeal, 4th District, Division 3, which sits in Santa Ana. Both Managing Attorneys are admitted to all California state courts.