State Bar of California
Super Lawyers

California Income Tax Problems & FTB Audits

The California Franchise Tax Board (FTB) has the responsibility for enforcing the California income tax laws. Some tax attorneys believe that the FTB is even tougher to deal with than the Internal Revenue Service (IRS). Nevertheless our California tax lawyers have experience negotiating effective tax solutions of both FTB tax audits, and FTB tax debts. Many FTB tax audits, are not tax audits at all. Instead they simply piggy-back off of IRS tax audit results.  If you have an IRS tax audit it’s pretty much a guarantee that the IRS will send those results to the California Franchise Tax Board, and that the FTB will send you a bill. In most cases there is not much point in disputing it, but there are some situations where it makes sense. Suppose for example you didn’t get timely notice of an IRS tax audit, and therefore you got stuck with an IRS bill. First, if you contact us soon enough, our California tax attorneys can file a protest with the FTB so that any enforcement action will immediately stop. Second, in many cases, our tax lawyers can reopen the IRS tax audit in order to be able to present all of your information to the IRS.

The California Franchise Tax Board may also conduct its own tax audit to look for tax problems that are unique to California income tax law. For example, if you have moved from or to California the FTB may argue that you are a resident of California for some period of time before or after you actually became a California resident in order to tax you on a large bonus you received. Our California tax litigators can review your records to determine whether the FTB is correct, and provide tax representation throughout the entire process.

Another area of difference between the IRS, and the California Franchise Tax Board are the rules regarding net operating losses. These rules are complicated, and change on what seems like a yearly basis. Because of these differences an IRS tax audit can result in no income tax being owed, but a large tax debt to the FTB. For that reason your California income tax debt may be larger than your IRS tax debt. Our Los Angeles, California tax attorneys can help you negotiate the maze of differences between California tax problems, and IRS tax problems.

If its clear that you owe the California Franchise Tax Board we can negotiate an installment payment agreement, or file an offer in compromise on your behalf.

Just contact us to find out how.
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