CALIFORNIA TAX ATTORNEY 310-571-5092

California Tax Problems

California tax law is complex, with various distinctions from other states. If you have tax issues in California, consulting a tax attorney familiar with California's tax laws, policies, and procedures is essential. If you try to address some of these problems without assistance, you could end up facing penalties or making the issue worse.

An experienced tax professional can help you navigate the complicated California state tax system. The California Tax Attorneys help individual taxpayers and businesses resolve their tax problems.

Common State Tax Issues in California

Our legal team has experience helping taxpayers resolve the following tax issues:

  • Offer in Compromise: An Offer in Compromise is when the state of California allows you to make an offer that reduces your tax debt. To qualify for an Offer in Compromise, you usually must be up to date on your tax returns, have exhausted all other payment options, and you don't want to dispute the amount you owe. California's various tax agencies may accept your offer based on your ability to pay, your current income and expenses, and the potential for changed circumstances. It's essential to negotiate the right offer if you want the state to accept it.
  • Audits: California's various tax agencies may audit you for a number of reasons. Perhaps the information you supplied on your return doesn't match the information the state has on you, or maybe you filled out your return incorrectly and underpaid as a result. Both individuals and businesses can be audited on their state taxes, and both have the right to appeal the decision of an audit as well. State tax audits are complicated processes that can take away from your business or daily life. A qualified tax attorney can deal with state audits on your behalf and ensure the process goes smoothly.
  • Payment Plans: If you owe back taxes and can't pay the full amount right away, California's tax agencies will usually agree to an installment plan. Depending on which agency your debt is with and how much you owe, a payment plan could last between 12 months and five years. The California Department of Tax Fee and Administration (CDTFA) has the most flexible payment plans, letting you choose your monthly payment amount. In some cases, you must apply for a payment plan and must meet certain criteria.
  • Payroll Taxes: Employers in California are responsible for collecting four types of taxes. These taxes include unemployment insurance, employment training tax, state disability insurance, and California personal income tax. The Employment Development Department (EDD) is the California agency responsible for collecting payroll taxes. If you don't pay and accurately report your employment taxes, the EDD can assess 100% of payroll taxes owed plus interest. The agency can also issue a tax lien against you. Keeping payroll taxes and employee classification (employee vs. independent contractor) is essential for running a business in California.
  • Unfiled Tax Returns: If you don't file your state tax return each year, California's Franchise Tax Board (FTB) can issue penalties. The penalty for not filing after receiving a Demand for Tax Return Letter is 25% of the tax owed. The state of California can also file a tax return on your behalf, using occupational data to assess your average income. These Substitute for Return (SFR) assessments usually aren't favorable for taxpayers, as the state doesn't take credits and deductions into account. If you have unfiled state tax returns from previous years, it's best to consult a tax professional to help you get up to date.
  • Sales and Use Tax: Merchants and businesses must adhere to California's sales and use tax laws. Paying the right amount of tax can be complicated if you order merchandise from another state and use it for your business in California, or if you're an out-of-state business selling goods and services to California residents. Not only do you have the statewide sales tax rate to worry about, but local jurisdictions and districts can set their own sales tax rates as well. An experienced tax attorney can help you ensure you're paying all the correct sales and use tax as a California business.
  • Residency Disputes: California has strict rules when it comes to residency and taxes. People who only spend part of their time in the state might still find themselves liable for California taxes. Nonresidents must also pay taxes for any income they generate in California.

Professional Assistance with California State Tax Issues

Why should you enlist professional help to solve these state tax issues? If you don't abide by state tax law—knowingly or unknowingly—you could receive harsh penalties.

Tax penalties in California:

  • Paying fees and interests on unpaid tax debt
  • Suspension of essential licenses (driver's license and professional licenses)
  • Potential jail time
  • Liens and levies

Tax penalties, no matter how severe, can significantly disrupt your life. Dealing with tax problems can also take up your time, keeping you from focusing on your business or daily life. When you have a tax problem in the state of California, you should try to resolve it as quickly as possible. A California tax attorney has the knowledge and experience to handle the problem efficiently and ensure a more favorable outcome.

Experienced California Tax Attorneys

If you have an outstanding tax issue with the state of California, the state will pursue you until you've paid your debt, filed your return, or taken the required action. Tax problems won't go away if you do nothing—the state isn't going to forget about the tax debt you owe. The California Tax Attorneys have solved state tax issues for more than 10 years, with experience handling complex tax laws. Our firm will keep your best interest in mind and help you achieve a favorable outcome.

If you have a California tax issue that needs resolving, the California Tax Attorneys can help. Set up a free consultation with our firm to discuss your problem.

Contact Us Today

California Tax Attorneys is committed to answering your questions about IRS Offer in Compromise, IRS Audit & Appeals, IRS Installment Plan Agreement, California State Tax Issues, IRS Tax Levies/Liens, Payroll Taxes & Trust Fund Recovery Penalty, Unfiled Tax Returns, and Sales & Use Tax law issues in California.

We offer a free consultation and we’ll gladly discuss your case with you at your convenience. Contact us today to schedule an appointment.

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