San Francisco Tax Attorney | Federal & California Tax Defense

Written by Sam Brotman, J.D., LL.M. (Taxation), MBA — Managing Attorney, Brotman Law  ·  Updated May 2026

What Sam Does for San Francisco Clients

A San Francisco tax attorney handles IRS and California tax disputes as legal matters — not accounting problems. The Bay Area produces some of the most complex individual tax situations in the country: tech founders with ISO exercises, venture capital investors with carried interest structures, real estate operators doing 1031 exchanges in one of the tightest markets in the state, and executives with multi-country compensation packages. Those situations require someone who understands both the tax law and how the IRS and FTB approach these cases.

I represent San Francisco and Bay Area clients across the full range of federal and California tax matters. On the federal side: IRS audits, IRS Criminal Investigation defense, Offers in Compromise, and Tax Court litigation. On the California side: FTB residency audits, FTB income tax appeals, EDD worker classification disputes, and CDTFA sales and use tax matters. The FBAR and international tax issues that come out of the Bay Area — particularly from executives at multinational companies and founders with foreign investment structures — are a regular part of what we handle.

Bay Area Tax Issues Sam Handles

IRS Audits — Northern District of California

An IRS audit is a legal proceeding, not an accounting reconciliation — and who represents you from the first contact with the examiner shapes how the case develops. The IRS field offices serving San Francisco and the broader Bay Area handle examination and collection cases for the Northern California territory. The U.S. Tax Court holds regular sessions in San Francisco at 450 Golden Gate Avenue, and the U.S. District Court for the Northern District of California handles tax refund suits and other federal tax litigation at the same address.

I handle correspondence audits, office exams, and full field examinations. Bay Area audits often involve substantial issues: business income for tech founders and executives, real estate basis and depreciation questions, partnership allocations, and unreported foreign accounts. The more issues in play, the more important it is to have an attorney managing the IRS's information requests rather than producing documents without a legal strategy. See our full guide to IRS audit defense.

Tech Founder Tax Issues — ISO Exercises, 83(b) Elections, QSBS

Bay Area startup equity creates tax exposure that most advisors underestimate until it becomes a problem. The three issues I see most often:

• ISO exercises and AMT: Under IRC § 422, incentive stock option exercises do not trigger regular income tax — but the spread on exercise is an alternative minimum tax (AMT) preference item under IRC § 56. Founders who exercised large ISO grants in a year when the stock price rose significantly can face six-figure AMT bills on income they have not yet received in cash.
• 83(b) elections: A founder who receives restricted stock must file an IRC § 83(b) election within 30 days of the grant to pay tax on the grant-date value rather than the vesting-date value. There are no extensions. A missed election cannot be undone. The IRS's position on late 83(b) elections is categorical: they are ineffective. Audit exposure from a missed election typically surfaces during a company liquidity event or when the founder's return is examined.
• QSBS exclusion under IRC § 1202: Early investors and founders in qualified small businesses can exclude up to 100% of gain on sale of qualifying stock. The exclusion is valuable and complex — the company must meet specific gross asset thresholds at the time of original issuance, the stock must be acquired at original issuance for cash or services, and the taxpayer must hold for more than five years. IRS audit activity around § 1202 exclusions has increased as exit valuations have grown.

FTB Residency Audits — The Bay Area Departure Problem

The California Franchise Tax Board taxes residents on worldwide income, and it aggressively audits high-income individuals who claim to have changed domicile — particularly Bay Area founders and executives who relocate after a liquidity event.

The FTB's residency audit framework looks at where a taxpayer's closest connections are — real estate, family, business relationships, club memberships, vehicle registration, and time spent in California. A founder who closes a Series B, announces they are moving to Austin, and then spends significant time in the Bay Area over the following two years is a classic FTB target. California taxes not just residency-based income but also California-source income — so even a genuinely departed founder who retains equity in a California-based company may owe California tax on gain from that equity.

I handle FTB residency audits, FTB administrative appeals before the Office of Tax Appeals (OTA), and multi-state residency disputes. If you have recently moved out of California and have significant Bay Area income ties, the question of what you owe California is worth getting right before the FTB asks.

EDD Classification Audits — Bay Area Tech and Gig Companies

California's AB5 and the EDD's audit posture have made worker classification one of the most significant tax risks for Bay Area tech companies with independent contractor workforces.

The EDD uses the ABC test (under California Unemployment Insurance Code § 621) to determine whether workers are employees for purposes of payroll tax. The ABC test presumes workers are employees unless the hiring entity can demonstrate: (A) the worker is free from control; (B) the work is outside the usual course of the hiring entity's business; and (C) the worker is customarily engaged in an independently established trade. Criterion B is the most difficult for tech companies to satisfy — a software engineer working for a software company is doing the usual course of the company's business.

EDD audits resulting from misclassification can result in substantial back payroll taxes, penalties, and interest. I represent Bay Area companies in EDD audits, classification disputes, and appeals.

FBAR and International Tax — Bay Area Executives with Foreign Accounts

The Bay Area has a substantial population of U.S. taxpayers with foreign financial accounts, foreign-sourced compensation, and international business interests — all of which carry federal reporting obligations with material civil and criminal penalty exposure.

A FinCEN Form 114 (FBAR) must be filed annually by any U.S. person with foreign financial accounts that exceeded $10,000 in aggregate value at any point during the year. Willful failure to file carries civil penalties up to the greater of $100,000 or 50% of the account value per violation. The IRS and DOJ have been consistent in FBAR enforcement, and the Bay Area's concentration of executives at multinational companies creates a recurring exposure area.

I handle FBAR compliance and amended filings, the streamlined filing procedures for non-willful violations, and voluntary disclosure under IRM 9.4.3 for situations with willful exposure. The voluntary disclosure program is available only before IRS Criminal Investigation makes contact — timing matters.

ERC Defense — Bay Area Businesses

Bay Area technology and services companies that claimed the Employee Retention Credit for 2020 and 2021 are facing IRS examination at an elevated rate. The IRS has flagged certain categories of ERC claims — particularly supply chain suspension arguments and claims involving partial suspension — for closer scrutiny.

An ERC audit is a legal matter. The questions the examiner is asking — whether a government order caused a full or partial suspension of your operations under IRS Notice 2021-20, whether your gross receipts declined by the required percentage, whether the wages you claimed were actually qualified wages paid to eligible employees — are questions with legal answers. I handle ERC audits, ERC appeals, and ERC reconsiderations. See our ERC audit defense practice page for more on the full spectrum of ERC enforcement.

Venture Capital and Real Estate Tax Issues

Venture capital fund structures, carried interest taxation under IRC § 1061, and 1031 exchanges in San Francisco's real estate market each have distinctive tax characteristics that create audit exposure.

For VC general partners based in the Bay Area, the three-year recharacterization rule under IRC § 1061 converts long-term capital gain to short-term gain on certain "applicable partnership interests" held for less than three years. The interaction of § 1061 with fund holding period rules and the exclusion for capital interests is a recurring issue in fund structures.

For real estate operators, 1031 like-kind exchanges in San Francisco's market often involve high-value assets, complex replacement property timelines, and questions about whether the exchange was properly structured under IRC § 1031 and Treas. Reg. § 1.1031. Failed exchanges — whether from timing problems, improper use of exchange proceeds, or basis allocation errors — have significant tax consequences that can surface in IRS examination years later.

Why Bay Area Clients Work with Sam

The short version is that tax representation quality is not a function of which city your attorney's office is in. What matters is whether your attorney has handled cases like yours, knows the relevant law, and can represent you effectively before the IRS or the California tax agencies. Those things are not geography-dependent.

I am a California-licensed attorney with an LL.M. in Taxation — a postgraduate tax law degree that is the standard credential for federal tax practice. I am admitted to practice before the U.S. Tax Court, the Northern District of California, and all IRS divisions under Form 2848. Since 2013, Brotman Law has represented over 400 clients in audits and recovered or saved $1B+ in taxes and penalties.

The practical advantage of working with a California attorney based in San Diego: the costs tend to be lower than Bay Area firms with equivalent credentials, and the practice is focused entirely on tax — not a general practice that also handles tax matters when they come up. Bay Area clients are a routine part of what we do, not an exception to our San Diego practice.

How SF Clients Work with Sam

The mechanics of tax representation are phone calls, document production, and formal proceedings — the vast majority of which work without geographic proximity. Most Bay Area clients work with me by phone and video. We start with a 15-minute introductory call to go through your situation. If it makes sense to move forward, we sign an engagement agreement and I get a Form 2848 Power of Attorney authorizing me to communicate directly with the IRS or California agency. From there, I handle the case and report to you at meaningful decision points.

For IRS proceedings in San Francisco or Tax Court sessions scheduled in Northern California, I travel. For FTB appeals or hearings before the Office of Tax Appeals, those are typically handled by written submissions. The honest assessment: most of what happens in a tax matter does not require your attorney to be down the street from you. It requires your attorney to know what they are doing and to manage the process.

Representative Matters

Each matter is unique. Past results do not guarantee any particular outcome. The following examples are representative of the types of Bay Area cases we handle.

Sam's Credentials

Samuel C. Brotman, Esq., is the managing attorney of Brotman Law, a California tax law firm founded in San Diego in 2013.

• California State Bar — licensed attorney, admitted to practice before all California courts and before federal courts in the state, including the Northern District of California
• J.D., LL.M. (Taxation), MBA — the LL.M. in taxation is the postgraduate law degree specific to federal tax practice; Sam holds all three credentials
• U.S. Tax Court — admitted to practice; Tax Court is the primary forum for contesting IRS deficiency determinations before paying the disputed tax
• IRS Representation — authorized to represent clients before all IRS divisions under Form 2848, including Examination, Appeals, and Collection
• Practice since 2013 — Brotman Law has focused on tax representation since its founding; this is a tax firm, not a general practice that also handles tax matters

You can reach our office at (619) 378-3138. For an initial conversation about your Bay Area matter, book a free 15-minute call and we can figure out what you are dealing with and what the options look like.