Tax Attorney in Santa Monica, California

Yes. The U.S. Tax Court designates Los Angeles as a regular place of trial, with sessions held at the Edward R. Roybal Federal Building and U.S. Courthouse at 255 E. Temple Street, Los Angeles 90012 — roughly 16 miles east of Santa Monica via the I-10 Santa Monica Freeway. Sessions are calendared multiple times per year. Santa Monica petitioners designate Los Angeles on the petition form. The federal U.S. Tax Court bar admission is national and the firm appears at the LA trial sessions directly without local counsel coordination.

RSU vesting is W-2 ordinary income at the fair market value on the vesting date under IRC §83(a). Employers withhold federal at the supplemental flat rate under IRC §3402(a) of 22 percent for supplemental wages up to $1 million per year and 37 percent only on amounts over $1 million in a single payment. A Snap senior engineer, a Hulu director, a Lionsgate executive, an Activision Blizzard producer, or a GoodRx product manager in the 35 or 37 percent federal bracket with combined W-2, bonus, and RSU income past $400,000 routinely sees the 22 percent supplemental rate undershoot by 10 to 15 points. California adds the gap on the state side — supplemental withholding at 10.23 percent against a 10.3 to 13.3 percent marginal rate under R&TC §17041. The April 15 balance-due plus failure-to-pay penalty plus interest can run six figures on one vesting year. The fix is Form W-4 additional federal withholding, DE 4 additional California withholding, or quarterly estimates under IRC §6654.

Exercise of an Incentive Stock Option does not produce regular-tax income, but the bargain element (fair market value at exercise minus exercise price) is an Alternative Minimum Tax preference item under IRC §56(b)(3), reported on Form 6251. If the company is private and you cannot sell the stock, you owe AMT in cash by April 15 with no proceeds. Options: (1) Federal IRC §6159 Installment Agreement — streamlined under $50,000, non-streamlined with Form 433-F over that, Partial Pay if the AMT exceeds your CSED-period collection capacity. (2) IRC §7122 Offer in Compromise where the doubt-as-to-collectibility math works. (3) Currently Not Collectible status freezing collection until a liquidity event. (4) IRC §53 deferred AMT credit recovers the AMT over future tax years but does not solve the current cash problem. (5) IRC §83(i) qualified-equity-grant deferral applies to certain private-company option arrangements with restrictive eligibility. The California AMT under R&TC §17062 carries its own separate exposure on the state side.

Santa Monica permits home-sharing only — renting a bedroom while you are physically present — and prohibits unhosted short-term rentals of an entire unit. The City levies a 14 percent transient occupancy tax on short-term rental gross receipts, plus a $2 per night Tourism Marketing District fee. Airbnb and similar platforms collect TOT on hosts' behalf in many cases, but the host remains the legally liable party for accurate remittance. SB 346 took effect January 1, 2026 and gives California cities the power to compel Airbnb, VRBO, and similar platforms to disclose host-level booking and revenue data — closing the prior anonymity gap. Santa Monica's Code Compliance unit cross-references those data feeds against business-license registrations to identify hosts operating without a permit, hosts running unhosted whole-unit rentals, and hosts under-remitting TOT. Federal exposure runs through Schedule E or Schedule C depending on the level of services, IRC §469 passive-activity rules, IRC §280A vacation-home limits, and §199A QBI for active short-term rental activity.

The closer-connection test under Cal. R&T Code §17014 and the Appeal of Stephen Bragg (2003-SBE-002) nine-factor analysis controls. Factors: location of all real-property holdings — did you keep the Ocean Avenue condo, the North of Montana house, the Sunset Park bungalow, or the Mid-City Santa Monica townhouse; spouse and dependent residence; vehicle registration; driver's license; voter registration; bank and brokerage account location; professional and social affiliations including gyms, churches, doctors at Providence Saint John's Health Center or UCLA Health Santa Monica, country clubs, and school district enrollment; business and employment ties; and the homestead exemption claimed in another state. The Appeal of Bindley (OTA 2018-OTA-179P) added the corporate-officer-day-count analysis. The FTB will examine three or four years and assess any year where you cannot establish a clean break. The defense package documents the move at the time of the move — lease or deed, voter registration, driver's license, vehicle registration, new doctors, kids in new schools, household-goods shipment, utility activations. Pre-move documentation wins this case.

An IRS exam on an IRC §1202 Qualified Small Business Stock exclusion walks through every qualifying condition. Original-issuance acquisition (stock acquired directly from the issuer, not on the secondary market). Five-year holding period from issuance to sale. The C-corporation requirement throughout the hold — an LLC-to-C-corp conversion under IRC §351 must be properly timed and documented. The $50 million aggregate gross-asset cap under §1202(d) tested at all times before and immediately after issuance. The active-business requirement under §1202(e) — at least 80 percent of assets used in qualified trade or business. The §1202(e)(3) exclusion list (health, law, engineering, architecture, accounting, performing arts, consulting, athletics, financial services, insurance, brokerage, banking, financing, leasing, investing, hospitality, and any trade where the principal asset is reputation or skill of employees). The §1202(c)(3) redemption rules that can disqualify the entire issuance. Working-capital and real-property limits. California decoupled from §1202 in 2013, so the exclusion is federal-only and California taxes the full gain. The substantiation file built at the time of original issuance — before any Snap, Activision, Disney, or Apple acquisition closed — is what saves the exclusion at audit.

Schedule C self-employment tax under IRC §1401 at 15.3 percent on net earnings up to the Social Security wage base plus 2.9 percent Medicare above. Quarterly estimated payments under IRC §6654 to avoid underpayment penalty — production cycles cluster income unevenly. The IRC §199A qualified-business-income deduction with the SSTB phase-out for performing-arts and consulting contractors at higher income levels. SAG-AFTRA Pension and Health Plan §401(a) employer contributions handled on union work alongside 1099-NEC reporting for non-union work. AB 5 analysis under Cal. Lab. Code §2775 — the entertainment industry carved out specific exemptions at Cal. Lab. Code §2778 for fine artists, freelance writers, photographers, and certain other creative occupations, but the carve-outs are narrow and producer engagements often fail the B-prong of the ABC test. Self-employed retirement vehicles (Solo 401(k), SEP-IRA, Defined Benefit cash-balance plans) provide the largest single tax-deferral lever. California layers personal income tax at 10.3 to 13.3 percent under R&TC §17041 plus the LLC fee under R&TC §17942 if you operate through a single-member LLC.

Yes — three of them. FTB compromise authority sits at Cal. R&T 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 under Cal. R&T Code §6832. EDD compromise authority sits at Cal. Unemp. Ins. Code §1192 for payroll tax. Each program has its own form, financial-disclosure standard, and review path. The FTB §19443 compromise unit sits at FTB headquarters at 9646 Butterfield Way in Rancho Cordova. Submitting an FTB OIC does not affect a federal IRS OIC; the two run on separate tracks. California is generally tougher on primary-residence equity than the IRS — relevant for Santa Monica households where the Ocean Park, North of Montana, Sunset Park, or Mid-City Santa Monica home equity often dwarfs the disposable-income calculation.

Two periods matter. For FTB assessment, Cal. R&T Code §19057 gives the FTB four years from a filed return to assess, with no statute on unfiled returns under §19058. For FTB collection, §19255 gives the FTB 20 years from the latest of assessment, due date, or final return filing — double the federal 10-year period under IRC §6502. 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. A Santa Monica filer watching the federal CSED expire in 2026 may still face FTB collection until 2036 on the same year. The FTB's reach into California-source income from Snap, Hulu, Lionsgate, Activision, GoodRx, Headspace, or FIGS RSU grants made during California residency, ISO exercises during California residency, and Santa Monica-sourced consulting or 1099 production income survives a move to Austin, Miami, Las Vegas, or anywhere else.

The Los Angeles County Assessor at the Kenneth Hahn Hall of Administration, 500 W. Temple Street, Los Angeles 90012 sends an Annual Notice of Assessed Value each year for every parcel in the county, including every parcel in Santa Monica. Disputes over assessed value go first to an informal Decline-in-Value (Prop 8) application filed with the Assessor, which compares the Prop 13 base-year value (capped at 2 percent annual growth) against the market value of the property on January 1 of the assessment year. If the Prop 8 application is denied or insufficient, the next step is a formal Application for Changed Assessment filed with the Los Angeles County Assessment Appeals Board at 500 W. Temple Street under Cal. R&T Code §1603-1611. The filing window runs from July 2 through November 30 of the assessment year under the LA County rule (broader than the 60-day window in most counties). The AAB hearing is on the record and the burden of proof sits on the taxpayer. Prop 19 parent-to-child transfers, base-year-value retention on age-55-plus moves, and commercial-property revaluations on change-of-ownership events all route through the same AAB.

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 run independent audit programs but share information through formal information-exchange agreements under IRC §6103(d). An IRS adjustment is reported to the FTB and a Revenue Agent Report can trigger a parallel California assessment within four years under R&TC §19057. CDTFA sales-tax audits and EDD payroll audits can run alongside both. A single Santa Monica filer with vested Snap or Activision RSUs, exercised ISOs at an acquired-startup position, a foreign account from a parent in Iran, India, or Korea, a single-member LLC consulting practice, a Lincoln Boulevard short-term rental, and a Mid-City Santa Monica primary residence can have one tax year open in four different forums simultaneously: IRS examination on equity-comp characterization, FTB examination on residency or sourcing, CDTFA examination on a side e-commerce sales-tax exposure, and EDD examination on whether consulting clients should have been W-2 employers.

Santa Monica Municipal Code Chapter 6.04 requires every person engaged in business within Santa Monica to obtain a Business License Certificate from the City Finance Department before commencing business. The annual tax structure is $75 base plus a percentage of calendar-year gross receipts exceeding the $60,000 small-business threshold, with the rate set by business classification. Effective fiscal year 2026-27, the most common service and sales classifications run $1.25 per $1,000 of gross receipts above $60,000. A Santa Monica-resident Schedule C consultant, a sole-prop short-term rental operator, a single-member LLC service business, a Main Street retail tenant, a Promenade restaurant, an Ocean Park studio operator, or a home-based tech contractor at a Snap, Hulu, Lionsgate, Activision, GoodRx, Headspace, or FIGS engagement all owe the tax. Failure to register and pay triggers penalties, interest, and potential prosecution under Santa Monica Municipal Code §6.04. The City Finance Department coordinates collection with the FTB and shares data on registered businesses.

An ESPP qualified under IRC §423 lets employees buy company stock at up to a 15 percent discount through payroll deductions, with favorable tax treatment if you satisfy two holding periods: two years from offering-date and one year from purchase-date. A qualifying disposition taxes the lesser of (a) the discount at grant and (b) the actual gain at sale as ordinary income, with the rest as long-term capital gain. A disqualifying disposition — selling before either holding period — taxes the full spread between purchase price and fair market value at purchase as ordinary compensation, regardless of subsequent stock movement. The disqualifying-disposition trap hits Snap, Activision, GoodRx, Hulu, Lionsgate, and similar employees who sell on the same-day or fast-flip program their broker offers. The W-2 Box 1 number often reflects the disqualifying-disposition ordinary-income amount, but the broker 1099-B reports the same amount as capital basis — creating a double-count if you do not reconcile Form 3922 and the broker statement on Schedule D and Form 8949. California decoupled from certain federal ESPP treatment in places, adding a sourcing complication for taxpayers whose offering and purchase periods cross a California-residency boundary.

Two-step analysis. First, the federal characterization — residuals and royalties from creative work performed as an employee under a SAG-AFTRA, WGA, DGA, or IATSE contract flow through W-2 reporting with industry-specific withholding, while royalties from independent intellectual-property licensing flow through Schedule E or Schedule C depending on whether you are in the trade or business of creating that work. Second, state sourcing — California taxes the share of compensation attributable to services performed in California under R&TC §17041 and the FTB sourcing rules at FTB Pub. 1031. For a Santa Monica-resident actor, writer, director, producer, composer, or technician working a Lionsgate, Hulu, or other Santa Monica production on residence days plus a Vancouver, Atlanta, New York, or New Mexico project on shoot days, the California share is the California-workday-fraction of total compensation. The other states each take their workday share. Residuals paid on the Santa Monica-shot project remain California-sourced even after the work concludes. A SAG-AFTRA Pension and Health Plan §401(a) contribution adjustment on later disqualified-distribution events adds a layer for vesting and distribution-rule compliance.

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 by the parallel federal common-law attorney-client privilege, subject to the usual exceptions (crime-fraud and waiver). The narrower federally-authorized tax practitioner privilege under IRC §7525 applies to CPAs and Enrolled Agents but does not extend to criminal-tax matters or to written communications in connection with the promotion of tax shelters. An attorney handling your tax case retains the broader privilege that survives criminal investigation — relevant for Santa Monica FBAR exposure where the willfulness question can shift the matter from civil examination into a criminal-tax referral process, and for §1202 QSBS substantiation exposure where the position at issue can run into seven and eight figures.

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 and PIT withholding) against the same class of responsible persons. CDTFA sales-tax personal liability under Cal. R&T Code §6829 operates under similar principles. A Main Street restaurant operator, a Promenade retail principal, a Montana Avenue boutique owner, an Ocean Park studio operator, a Lincoln Boulevard service business, or a Pico Boulevard auto-row tenant who closes with unpaid 941s usually faces all three exposures simultaneously — federal TFRP, EDD §1735, and CDTFA §6829.

IRC §7345 authorizes the IRS to certify seriously delinquent federal tax debt — $62,000 for 2026, indexed for inflation — to the State Department, which may then deny passport renewal or revoke an active passport. The certification reverses when the debt is paid, an Installment Agreement is in place, an OIC is accepted, an active CDP hearing is pending, or Innocent Spouse Relief is in process. For green-card adjustment under USCIS Form I-485 and naturalization under Form N-400, applicants must disclose federal and state tax filings and any outstanding balances. Failure to file required returns can lead to a good-moral-character finding against a naturalization applicant under 8 USC §1101(f)(3). The cleanest path: enter an Installment Agreement or accepted OIC before the next renewal, adjustment-of-status filing, naturalization filing, or international travel. Santa Monica's large Iranian-American, Korean-American, and Russian-speaking communities along Westwood-adjacent corridors and in the Ocean Park and Mid-City Santa Monica neighborhoods carry parallel FBAR and Form 8938 exposure that should be cleaned up through the Streamlined Filing Compliance Procedure before any naturalization filing.