California Tax Attorney

The three California agencies, and what each one does to you

Franchise Tax Board (income tax)

The FTB audits residency, income sourcing, and business deductions, and it is the agency that decides whether California can tax you at all after you move. Its collection powers are broader than the IRS’s in one respect that matters: the FTB generally has 20 years to collect an assessed liability, against the IRS’s 10. A proposed assessment comes as a Notice of Proposed Assessment. You have 60 days to protest it. If the protest fails, the appeal goes to the Office of Tax Appeals, the independent body that replaced the Board of Equalization’s appellate role in 2018. Our FTB audit defense page covers the examination side; residency and multi-state covers the exit cases.

California Department of Tax and Fee Administration (sales and use tax)

CDTFA audits are where restaurants, contractors, retailers, and online sellers get hurt, because the auditor rarely counts every transaction. The audit is built on a sample and a markup test, and the sample is where the number comes from. The audit ends in a Notice of Determination, which gives you 30 days to file a petition for redetermination. Miss it and the assessment is final. After the petition comes an appeals conference and, if needed, the OTA. Owners can be assessed personally under Revenue and Taxation Code section 6829 when a corporation closes owing sales tax. Start with our CDTFA audit attorney page, or with what to do with a Notice of Determination if one has already arrived.

Employment Development Department (payroll tax)

The EDD audits whether your independent contractors were actually employees under California’s ABC test, then assesses unemployment insurance, employment training tax, disability insurance, and personal income tax withholding on the reclassified wages, with penalties. The assessment comes as a Notice of Assessment. A petition for reassessment has to be filed with the California Unemployment Insurance Appeals Board within 30 days. Responsible persons can be assessed personally under Unemployment Insurance Code section 1735. See EDD audit attorney.

Why a California-licensed tax attorney, specifically

Federal tax practice is national. California tax practice is not. Any competent tax lawyer can handle an IRS audit from any state, because the Internal Revenue Code and the Tax Court are the same everywhere. FTB, CDTFA, and EDD matters run on California statutes, California regulations, California personnel, and California forums: the OTA, the CUIAB, and the superior courts. The auditors and appeals officers are people we deal with every week. That is not a marketing line. It is the difference between guessing how a CDTFA appeals conference will go and knowing.

It also matters that a California tax attorney can take the case past the agency. A CPA can represent you in an FTB protest. Only an attorney can file the refund suit in superior court, defend the responsible person assessment, or handle the matter when the CDTFA’s Investigations Division or the EDD’s investigators get involved and the file goes to a district attorney.

What we handle across California

• FTB: residency audits and the “California exit” cases, income sourcing disputes, business deduction audits, protests, OTA appeals, collections, and FTB Offers in Compromise.
• CDTFA: sales and use tax audits, sampling and markup disputes, petitions for redetermination, appeals conferences, OTA hearings, successor and responsible person liability, and criminal referrals.
• EDD: worker classification audits, Notices of Assessment, petitions for reassessment, CUIAB hearings, personal liability under section 1735, and EDD criminal investigations.
• IRS, alongside the state: most California cases have a federal twin. An EDD reclassification becomes an IRS employment tax issue; an FTB residency audit follows the federal return; a CDTFA fraud referral rarely stays at the state level. We run both tracks from one file.
• State tax debt: installment agreements, Offers in Compromise, hardship status, penalty abatement, and lien and levy releases with each agency, covered on California tax debt resolution.

Who we represent

Mostly businesses and the people who own them: restaurant groups, construction and specialty contractors, e-commerce sellers, property managers, professional practices, and companies with workers on 1099s. On the individual side, people who left California and got an FTB letter anyway, and people with income the FTB thinks is sourced here. Since December 2013 the firm has represented 400+ clients in audits, eliminated more than $100 million in tax penalties and interest, and resolved 2,200+ matters. We work from San Diego and represent clients in every county in the state. Nearly everything with the FTB, CDTFA, and EDD happens by mail, phone, and video, and the OTA hears cases in Sacramento, Los Angeles, and Fresno, so where you live rarely matters.

What it costs

We quote the fee before you sign. Flat fees start at $3,500 for scoped work, monthly flat-fee engagements start at $3,500 a month and pause when we are waiting on the agency, and hourly work runs $350 to $675 an hour for litigation and matters that cannot be scoped. Details are on the pricing page. The first 15-minute call is free and usually tells you what kind of case you have and whether you need us at all.

Frequently asked questions

Do I need a California-licensed attorney for an FTB, CDTFA, or EDD matter?

For the administrative stages, a CPA or enrolled agent can appear for you. For anything that may reach the Office of Tax Appeals, a responsible person assessment, superior court, or a criminal referral, you want a California-licensed tax attorney who works those forums regularly. The state agencies are procedural, and procedure is where cases are won.

Can you represent me if I live outside California?

Yes. California tax matters are administrative, and we represent out-of-state clients with California nexus, former residents under FTB audit, and remote sellers under CDTFA audit routinely. Hearings can be attended by counsel without you traveling.

What is the Office of Tax Appeals?

The OTA is the independent state body that hears appeals from FTB and CDTFA decisions. It replaced the Board of Equalization’s appellate function in 2018. Cases are decided by three-judge panels of administrative law judges, and its written opinions are public.

How long does the FTB have to collect a tax debt?

Generally 20 years from the date the liability became due and payable, twice the IRS’s 10-year collection statute. Waiting out a California tax debt is rarely a workable plan, which is why resolution with the FTB usually means an installment agreement, an Offer in Compromise, or hardship status rather than time.

How is an FTB audit different from an IRS audit?

The FTB often starts from the IRS’s result: a federal adjustment triggers a California one, and you have to report a federal change to the FTB within six months. The FTB also audits things the IRS does not, chiefly residency and California-source income. Deadlines are different too: 60 days to protest a Notice of Proposed Assessment, then the OTA rather than the Tax Court.