Best Tax Lawyers in California

About Tax Law in California, United States

Tax law in California encompasses federal, state, and local regulations governing the collection and payment of taxes by individuals, businesses, and other entities. California is known for its complex tax system, which includes income tax, sales and use tax, property tax, and various specialized taxes. The state operates the Franchise Tax Board (FTB) for income tax collection, and the California Department of Tax and Fee Administration (CDTFA) for sales, use, and special taxes. Because state tax law frequently interacts with federal requirements established by the Internal Revenue Service (IRS), navigating California's tax landscape can be challenging for residents and business owners alike.

Why You May Need a Lawyer

There are several situations where individuals and businesses in California may need the assistance of an attorney who specializes in tax law. Common scenarios include:

• Facing an audit by the IRS, FTB, or CDTFA
• Disputing a tax bill or assessment
• Resolving tax debt or negotiating payment plans
• Challenging wage garnishments or tax liens
• Seeking advice on tax planning for businesses or estates
• Navigating the tax implications of property or business sales
• Addressing tax concerns related to inheritance or gifts
• Setting up a new business and understanding tax obligations
• Dealing with back taxes or non-filing issues
• Understanding changing tax laws and how they affect personal or business finances

A qualified tax attorney can clarify the law, represent you before tax authorities, negotiate settlements, and help you avoid costly penalties.

Local Laws Overview

California’s tax system is extensive and unique in many respects. Residents are subject to both federal and state income tax, with California income tax rates being among the highest in the nation. Sales tax is imposed on most goods and some services, and local jurisdictions may add their own tax rates resulting in total sales taxes that vary by location. Property taxes are determined by county assessors based on Proposition 13, which limits annual increases in property tax assessments. Additionally, California has special taxes, such as those on gasoline, tobacco, alcohol, cannabis, and environmental fees. Business entities face a variety of state-level taxes, including the corporate franchise tax, and must often comply with specific registration and reporting requirements.

Staying compliant with California’s complicated tax laws can be demanding, as rates and rules may change frequently. Mistakes can lead to penalties, interest, and legal consequences.

Frequently Asked Questions

What is the deadline for filing California state income tax returns?

The regular deadline is April 15 each year. If this date falls on a weekend or holiday, the deadline is extended to the next business day. California may also conform to IRS deadline extensions in certain situations.

How does California's state income tax differ from federal income tax?

California tax rates and brackets are different from those of the IRS. Some deductions available federally may not be allowed by California, and vice versa. You must file separate returns for state and federal taxes.

What should I do if I cannot pay my tax bill in full?

You should still file your return on time to avoid late filing penalties. California offers installment agreements and payment plans. A tax attorney can help negotiate manageable terms with tax authorities.

Can I be audited by both the IRS and the California Franchise Tax Board?

Yes. The IRS and FTB conduct independent audits and may share information. An audit by one agency can sometimes trigger a review by the other.

What are the penalties for failing to file or pay taxes in California?

Penalties can include late filing and payment fees, interest on unpaid taxes, and in severe cases, criminal charges. Persistent unpaid taxes can result in wage garnishments, bank levies, or liens on property.

How are property taxes calculated in California?

Property taxes are generally based on the assessed value of the property as of the purchase date, with annual increases capped at two percent per Proposition 13, unless there is a change in ownership or new construction.

Are there tax exemptions or credits available for California residents?

California offers a range of credits and exemptions, including the California Earned Income Tax Credit (CalEITC), renters’ credit, and various business credits. Eligibility depends on income, filing status, and other factors.

Do I need to pay sales tax for online purchases in California?

Generally, online purchases delivered to a California address are subject to sales or use tax, regardless of where the seller is located. Sellers meeting certain thresholds must collect and remit sales tax to the state.

What taxes do businesses in California need to pay?

Businesses may be responsible for several taxes, including income tax, sales and use tax, employment taxes, and specialized taxes or fees depending on the industry. Proper business registration and tax compliance are essential.

How can a tax attorney help resolve back tax issues?

A tax attorney can communicate with tax agencies, negotiate settlements (such as offers in compromise), set up payment plans, represent you in court, and guide you through complex regulations to resolve back tax matters efficiently.

Additional Resources

For more information or assistance on California tax matters, you may contact the following resources:

• California Franchise Tax Board (FTB) - For income tax questions and individual/business tax matters
• California Department of Tax and Fee Administration (CDTFA) - For sales, use, and special taxes
• Internal Revenue Service (IRS) - For federal tax issues
• California State Bar Association - For finding licensed tax attorneys
• Legal Aid organizations and local law libraries - For low or no-cost legal guidance
• County Assessor’s Office - For property tax inquiries
• Small Business Development Centers (SBDC) - For business tax education and support

Next Steps

If you need legal assistance with taxes in California, consider the following steps:

• Gather all relevant documents, such as tax returns, assessment notices, audit letters, and correspondence from tax agencies
• Identify the deadline or urgency of your issue, as filing and payment timelines are often critical
• Reach out to a qualified California tax attorney, especially for matters involving audits, disputes, or significant legal risk
• Use the resources provided above to seek free or low-cost guidance if affordability is a concern
• Stay organized and proactive - timely response to tax notices can prevent escalating penalties and complications

Effective legal help can protect your rights, reduce stress, and lead to better outcomes in complex tax matters.