01
What triggered the audit?
Any activity that raises a red flag with the FTB can trigger a residency audit. It can be something as simple as living in another state and having a second home in California, to a tip-off from the IRS or another third party. Various factors go into the audit, such as where your spouse and your children are, where they go to school, what are the locations of your bank accounts, where you are registered to vote, where your car is registered, and so on.
02
What is the FTB looking for?
A residency audit is putting a microscope on your life, from your spending habits to where you work. The FTB is looking for ties between you and the state of California, enough to deem you a resident. These audits are especially complex because there is no one factor that determines your residency. They are fact-specific and dive into every aspect of your life. It's important to have thorough documentation to help prove your residency.
03
Will I owe penalties?
The FTB is intent on recovering as much tax revenue as it can, and will stop at nothing to hunt down taxpayers who they suspect may be withholding tax payments to the state. If the FTB decides you owe taxes to the state of California, the penalties and interest could double or triple your liability. Until you address the problem, the penalties and interest will continue to accumulate. With Brotman Law, we can assess the situation and mitigate the penalties.
