CALIFORNIA INCOME TAX (FTB)
State tax agencies are much more aggressive in their collection tactics, due to taxation being the principal source of revenue, and California is no exception. High taxes, along with a high cost of living, make California a challenging state for entrepreneurs and businesses. We designed this service to give people and business owners like you the support and expertise you need to go up against this California powerhouse. Our team has handled hundreds of Franchise Tax Board audits, giving us ample experience, and making our strategies tested and true.
SAVE YOU MONEY
We save you money in the current tax year and create savings that will undoubtedly send a ripple through the coming years. In the long run, thousands of dollars will grow to hundreds of thousands, then millions in savings.
GREATER WEALTH
We help you keep more money in your pockets for investing, saving, or anything else that contributes to a good life. Our attorneys strive to reduce your lifetime tax liability by implementing different legal tax optimization strategies.
PEACE OF MIND
We work with you to ensure every item is correctly captured on your tax returns allowing you to enjoy greater peace of mind.
Overview
Franchise Tax Board auditors are given a lot more latitude and free rein than IRS auditors, which means they can define the scope of the audit and conduct a detailed examination. They receive significantly more autonomy than most collection agents and they alone can pose a challenge, which makes the relationship between the state examination representative and yourself very important. We approach these relationships from a collaborative standpoint, rather than a confrontational standpoint.
We understand the importance of maintaining the relationship with the auditor and use our years of experience to steer the direction of the audit in your favor. As we like to put it, you will catch more tax breaks using honey, not vinegar. As such, active compliance and mutual respect is paramount on the path to a favorable resolution of your tax audit.
Nexus in CA
What Else Should I Know?
California is one of the most aggressive tax agencies. Their threshold for the seriousness of a certain liability is much lower than the IRS level. This means California takes smaller liabilities much more seriously than the feds do and they’re a lot quicker to assess them and take action.
Even if the discrepancy on your tax return seems small, California will put you under a tougher financial standard and they’re going to be a lot harder to deal with. When it comes to the state law versus the federal law, there’s generally fewer statues that are constructing the framework for collections and examination functions, giving auditors a lot more free-rein in these audits.
Part of our process is pre-auditing all our clients to help us identify any issues that may become present during the audit. This way, we go into audit meetings well prepared and without fear of surprises. By pre-auditing you, we can make sure to control the flow of information and how that information is communicated to the auditor.
We develop our audit strategy before walking into our first meeting, so we know what direction we need to steer the audit in. We don’t hide bad facts, but we present them in a way that is supplemented by good facts.
Our approach differs from a lot of firms out there because we truly understand the FTB. We know that because the discretion auditors are given, the relationship with your auditor is one of the most important things to maintain. Along with this is how you or your business is presented to the FTB.
By pre-auditing you, we can get all your books and records in order, making you appear well organized and prepared to the auditor. This is key, because if the auditor thinks you are a well-organized person, this will ease their doubts about you preparing your tax return inaccurately. Pre-auditing is a significant amount of work, but this strategy has proven to help our clients have a smoother audit and achieve better outcomes.
WE KNOW OUR STUFF
We have a lot of experience, particularly with dealing with the state, which is rare. Most firms avoid the state of California, due to its difficulty. Our experience is very valuable because we not only understand the law, but we know how it works and the best way to apply it businesses.
THE RIGHT THING
A lot of our clients want to do the right thing, but they just don’t know how. The state of California lacks consistency and uniformity in how they enforce their rules, making it hard for clients to do the right thing. We understand this, and we’ll help you set things straight.
PERSONAL ATTENTION
Part of our process is pre-auditing your tax returns to find any mistakes or surprises that may come up during the actual audit. We do this for every single client, so when working with us you’ll know that your audit strategy was curated specifically for you.
Our Clients Will Tell You: We Get Results.
Tax Strategies, Case Studies, and Thought Leadership
Hundreds of $1,000,000s
Saved in Tax Penalties
100+
Appeal Victories
$1B+
Saved in Taxes
150+
Multimillion and billion-dollar corporate transactions
11+
Tax Services
400+
Clients represented in an audit
$160M+
in ERC Tax Credits
Our Thought Leadership Has Appeared In
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Book a Free 15-Minute Assessment Call
Set up a quick call with our firm’s concierge to see if we’ll be able to help you. The whole process will take 15 minutes or less.
STILL HAVE QUESTIONS?
First, don’t panic. The FTB audits people for many different reasons but, generally speaking, when the FTB audits an individual or business, it’s expecting to yield additional tax due and owing on a return. The FTB is looking at the relationship between the amount of income you earn, the amount of expenses you claim, and the net result.
If you are concerned about your audit, contact us to have a consultation to evaluate your situation.
The FTB has a collections manual, but it’s nowhere near as in depth as the IRS manual. Because of the lack of detail, there is a lot more discretion given to the front-line collection agents and the managers. What naturally tends to happen is California squeezes taxpayers a lot harder and demands more stringent payment terms than the IRS would.
When it comes down to an income tax audit, the Franchise Tax Board is looking for the following:
- Unreported income
- Claims for deductions that might be incorrect
- Missing income records
- Unfiled tax returns
- Irregularities in income records
Even if a mistake on your tax return wasn’t intentional, the FTB will not hesitate to increase your tax bill when they find it. Tax bills from the FTB can be hefty when accounting for interest and penalties.