Blog Archives - Page 33 of 52

Franchise Tax Board (FTB) Offer in Compromise: California Offer in Compromise 101

April 23, 2026May 18, 2016 by Brotman Law

Key Takeaways

It is a problem that many individuals or business owners in California have faced.
Generally, if you do not pay the taxes due to the state on time, you will be sent a notice in writing, informing you of how much you owe.
The FTB will expect you to exhaust most other avenues for paying off your tax debt.

It is a problem that many individuals or business owners in California have faced. You may have had a difficult year financially, and when tax time rolls around you discover that you owe more to the California Franchise Tax Board (FTB) than you can afford to pay. If this is your situation, there is light at the end of the tunnel. The FTB is willing to work with cooperative delinquent taxpayers to come up with a solution that works for both parties. One of these solutions is the offer in compromise (OIC). Could it be the right choice for you? You need to understand what is involved, how it can help your situation, whether you are eligible and how to apply before you can make a decision.

California Sales Tax Audit: Everything You Need to Know

April 23, 2026May 11, 2016 by Brotman Law

Key Takeaways

Facing a sales tax audit is an intense time for any business.
There are many reasons that your business could end up under the scrutiny of a BOE sales tax audit.
These are some of the reasons that grocery store, bars, restaurants, and other businesses in the hospitality sector are frequently audited.

Facing a sales tax audit is an intense time for any business. Even if you are sure that your bookkeeping and records are impeccable, the painstaking process of proving your honesty takes up a lot of time and resources, and hosting an auditor as they comb through your books is always a stressful prospect.

Most California businesses will deal with a sales tax audit at some point, and understanding why and when sales tax audits happen and what to expect is the best way to be prepared when your number comes up.

Am I Going to Be Hit With an Estimated Tax Payments Penalty?

April 23, 2026May 4, 2016 by Brotman Law

Mistakes can be costly if left unchecked

Key Takeaways

Mistakes can be costly if left unchecked
Calculating your estimated tax
All about Underpayment Penalties

For many people, income tax withholding is something that happens automatically: you indicate your tax withholding rate to your employer on a W-4 form for federal taxes and a DE 4 form for California, and the taxes are taken out before you even see your paycheck. If your employer withholds at the correct rate, chance are you’ll end up with a nice refund at tax time.

California Tax Audit Statute of Limitations: Is Time on Your Side?

April 23, 2026April 27, 2016 by Brotman Law

A sales tax audit is a sobering ordeal, but it is one that many (if not most) California businesses will face eventually.

If you are selected for an audit by the California Board of Equalization (BOE), you will have to prepare a wide range of documents and records for your auditor to review, but how far back will the BOE want to look, and what are your rights?

Today, we will take a look at the California tax audit statute of limitations within the California sales tax audit process and what this means for your business.

What Is a Trust Fund Recovery Penalty (TFRP): Your Ultimate Guide

April 23, 2026April 6, 2016 by Brotman Law

If your company has been struggling with tax issues and the resulting penalties, the trust fund penalty (TFRP) can be a crushing blow with far-reaching consequences for your personal financial security and future.

But all is not lost…

Join us as we discuss common questions, such as “what is the trust fund recovery penalty?” and, “how do you avoid the trust fund recovery penalty?”

So, what is a trust fund recovery penalty?

Also sometimes referred to as the “responsible person penalty,” a trust fund recovery penalty is a personal liability that may occur if a company’s payroll taxes are not properly remitted to the Federal government.

Typical examples of employment taxes not remitted are Medicare and social security deductions from employees’ wages.

It forms part of the payroll tax audit, and is definitely not something you should ignore.

How much is the trust fund recovery penalty?

For uncollected tax, the trust fund recovery penalty calculation is the employee’s part of any withheld FICA taxes plus withheld income taxes, and will be the same amount as unpaid trust fund taxes. For collected taxes, trust fund recovery penalties are the unpaid amount of collected excise taxes.

An Introduction to Payroll Tax Fraud: EDD Investigations

April 23, 2026March 30, 2016 by Brotman Law

Payroll tax fraud can occur either through deliberate criminal activity or simply because an employer or employee has provided inaccurate or incomplete information. The Employment Development Department (EDD) takes payroll tax fraud extremely seriously, so it is imperative that you understand the ways in which fraud can occur and take the necessary steps to avoid committing fraud.

Read more

Income Withholding Order: How to Process an EWOT

April 23, 2026March 16, 2016 by Brotman Law

Man handing over a check for ERC refund process 2025.

Key Takeaways

As an employer, you may receive an income withholding order in relation to one of your employers.
If a higher priority order, such as a court ordered withholding order for child support or JWOT, is issued after an EWOT, it takes priority. The EWOT will then be calculated as the remainder of 25% of the disposable income, if any.
If a second EWOT is issued when a first EWOT is in effect, the first EWOT remains in effect and is not displaced. The second issuer should be notified that the first EWOT is in place and you are already withholding on that order.

Being served with an income withholding order can be a disconcerting experience as an employer. These orders can come from a variety of sources, but they are all legally binding and require careful handling. Understanding how these orders work, what your obligations are regarding them, and how to comply with them is very important. Failing to do so can have severe consequences for you and your business.

Penalty Abatement: Eliminating FTB Tax Interest

April 23, 2026March 2, 2016 by Brotman Law

Key Takeaways

On top of this interest, a delinquent penalty rate is charged. The rate is 5% of the total unpaid tax, and a further 0.5% for each month or part of a month over the due date that the tax remains unpaid, up to 40 months.
There are six recognized circumstances under which the Franchise Tax Board will consider tax interest abatement. Each has its own specific rules and requirements which must be met in full when applying for abatement.
This is another case where a mistake by the FTB can mean that you are not liable for interest on your tax liability, and it applies to individual taxpayers and businesses.

If you have an outstanding tax liability owed to the California Franchise Tax Board (FTB) past the due date, your tax bill is at risk of growing much larger over time. By law, the Franchise Tax Board must charge interest on unpaid taxes. This interest is charged from the due date until the date it is paid, is adjusted twice a year, and compounds daily.

On top of this interest, a delinquent penalty rate is charged. The rate is 5% of the total unpaid tax, and a further 0.5% for each month or part of a month over the due date that the tax remains unpaid, up to 40 months. Other penalties for returned checks, understatement, negligence and fraud may also add to the overall total owed to the FTB. There is no “reasonable cause” exception for interest due on your tax assessment. In some specific cases, however, you may qualify for tax interest penalty abatement. This concession from the FTB can make paying your late taxes less of a burden.

Tax Franchise Board Liens: When California Comes for Your Money

April 23, 2026February 24, 2016 by Brotman Law

Key Takeaways

If you have received a notice from the FTB requesting payment in full on a past due balance or informing you that a collection process has begun, you are probably under considerable stress.
The topic of tax liens can be complicated and intimidating the first time you approach it, but the basic principles are not difficult to understand.
In the case of the California Franchise Tax Board, a lien is generally recorded after a demand for payment has gone unanswered.

The repercussions of an unpaid balance due to California Franchise Tax Board (FTB) can be severe, especially for a small business owner with everything to lose. The law allows the FTB to pursue payment of tax debts aggressively through a number of involuntary collection actions. All of these actions are deeply unpleasant, and some can be devastating.

If you have received a notice from the FTB requesting payment in full on a past due balance or informing you that a collection process has begun, you are probably under considerable stress. The first thing that you should do is make sure that you fully understand the situation, and if necessary, find qualified legal representation for the next steps.

Why Hire an Attorney for Sales Tax Representation?

April 23, 2026February 17, 2016 by Brotman Law

Key Takeaways

For small business owners with everything on the line, facing down a sales tax audit is a hugely intimidating prospect.
In theory, reporting and paying sales tax is a simple process, but in practice it can be anything but. There are a thousand small ways that businesses can miscalculate or underpay the sales tax due to the Board of Equalization.
Sales tax audits and the appeals process that follows them are extremely complicated due to the technical nature of how the Board of Equalization assesses sales tax.

For small business owners with everything on the line, facing down a sales tax audit is a hugely intimidating prospect. In spite of all the possible complications during the audit process, we still see many people attempting to represent themselves before the Board of Equalization. When you are facing a frighteningly large sales tax determination and desperately trying to cut the costs associated with handling the matter, the temptation to tackle the audit yourself rather than investing in a qualified tax attorney can be strong. It is an understandable instinct, but it may not be in your best interest.