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California Residency . Tax Audits . Appeals . Planning for Nonresidents

California employs a complex system for determining residency for tax purposes, with few bright-line rules.  As a result, every year, hundreds of nonresidents with vacation homes (mostly in the Palm Springs area, often called "snowbirds"), investments, deferred compensation, or other property in California get swept up into a "residency audit," an investigation by California's tax authority, the Franchise Tax Board, to determine whether the person is a resident or not under applicable law.  It makes a big tax difference.  If a person is a nonresident of California, he owes income taxes only on income with a source in California (and there often isn't any).  If the person is a resident, California taxes his global income, from any source, anywhere in the world.  So the FTB is motivated to audit and declare high-income snowbirds as residents, or to rule that people who move out-of-state for retirement or business purposes remain residents, especially if a large taxable event, such as a stock sale, follows shortly thereafter.

Sanger & Manes has a decades-long record of success in residency audits and appeals, saving taxpayers millions of dollars in income tax assessments.  The Firm also consults with clients to reduce the risk of a residency audit, to respond to FTB notices for residency information (the dreaded "4600 Notice" nonresidents often received as a prelude to a full audit), and to assist in tax planning for snowbirds with vacation homes, business people and retirees moving out-of-state, and entrepreneurs engaged in e-commerce, internet business or working remotely from out of state.

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Sanger & Manes Fixed-Fee Departure Plan, Vacation Home Plan, or Remote Worker Consultation

Residency tax issues often require a thorough analysis of complex financial interests, such as deferred compensation plans, stock options, and business entity contracts.

However, many taxpayers simply need guidance in putting together a plan for changing their legal residence from California to another state in compliance with California residency law.  Or they are snowbirds who want to buy a vacation home or some other single investment in California, while minimizing their risk of a residency audit.   Or they wish to work remotely out of state, via e-commerce or other internet solutions, to provide services or products to California, without being deemed California residents.

For those clients, Sanger & Manes offers fixed-fee consultations, via telephone or in person. For the fixed fee, Sanger & Manes will answer unlimited residency-related questions that don't involve reviewing complex financial arrangements, and will assist in putting together a departure plan, vacation home plan or remote worker plan, including appropriate checklists, to minimize the risk of a residency audit in the future.  Contact us for more details.

Questions? Contact Us

Contact Information

Office Location

Sanger & Manes, LLP
36953 Cook Street, #103

Palm Desert, CA 92211

Phone:

(760) 558-9534

Fax:

(760) 320-0351

Email:

[email protected]

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Martindale Hubbell|AV Preeminent|Peer Rated for Highest Level of Professional Excellence


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