How We Can Help You
The way you can very simply think about the multi-state and international tax services our firm performs is:
- We help people/businesses navigate varying degrees of tax crisis/controversy through our audit, collections, and criminal tax defense practices
- We help people/businesses avoid these situations by bringing them into compliance.
- We improve our clients’ tax situations in order to save taxes, accumulate net wealth, and help their businesses grow.
However, within these service areas, perhaps our hottest practice area is in helping multi-state companies and/or those that have some international aspects comply with the laws and utilize their framework to succeed in their business. Increasingly, with the proliferation of technology and enhancement of logistics, more and more companies fall into this definition.
Here are some areas we can help with multi-state and international tax issues:
- Multi-State Payroll Tax Issues
- Multi-State Income Tax Issues for Businesses
- Multi-State Residency Issues for Individuals
Navigating a Changing Landscape
A few years ago, you would not have thought of a small retailer selling books on Amazon as a multi-state business, but the reality of today’s situation is that these companies have operational impact well beyond their state’s borders. When they first come to us, our prospective clients do not really see themselves as multi-state businesses, but by the time we are finished with their matters, we have built them and effective and affordable framework for compliance.
The landscape has completely changed and will continue to change. The expansion of concepts such as economic nexus and the rapidly changing state laws and state enforcement priorities almost making writing about this subject a lost cause (the laws are changing that quickly). So, please take what you read here with a grain of salt, because as time passes this page may quickly be not entirely accurate. That is not intentional, but you should understand that no legislative process, administrative law, or judicial interpretation is going to move as fast as technology does these days.
As soon as the state issues a decision, it is almost obsolete because someone is doing things a different way. From our perspective, it is what makes this area of law so exciting, but in the same breath, it can be terrifying for our clients who are just trying to get compliant and stay out of trouble in an uncertain world. In the past, businesses did not need to factor in this kind of fluidity.
Additionally, states and in particular California, are becoming more and more aggressive in their definition of who has a filing requirement and who owes them tax. At times, it seems like more than half of our clients are out of state businesses who have somehow stepped into a California issue in some way shape or form. The majority of these businesses did so unintentionally, after all, who really thinks about the consequences of their business operations in a state that they are not in? Nevertheless, intent is not a factor in whether or not you are subject to multi-state taxation and because of a variety of factors, you may be operating and accruing liability in California and not even know it.
As mentioned, California is one of the more aggressive states in pursuing businesses that are located outside of its borders for tax revenue. California seemed to realize the fact sooner than other states that it could go after businesses and individuals that may have contact with the state of California, but who actually don’t actually reside in California and who don’t have voting power in California. Did you know that California has actually increased its base of operations and now has offices in New York, Texas and Illinois, which serve as regional jumping off points for out-of-state California tax compliance. That’s right, you can get audited in New York or Texas or any other state by a California auditor and be subject to California state tax.
Challenges for Multi-State Businesses
- How do we manage and mitigate risk when the law is unclear or when we operate in different states with different or conflicting laws?
- How do we stay in compliance in light of a fast moving changes in certain sectors?
- How do we manage to avoid issues without dedicating substantial resources to our compliance? How can we make this cost effective and build an infrastructure that makes sense for the size of our company?
Federal Tax Defense: The IRS
The IRS has long been an organization that strikes fear in the hearts of many. Owing money to the government or being the subject of a government investigation conjures up images of agents in your home or raiding your office, hauling you away in front of your family, and throwing you into federal prison. While some of these images are sensationalized and tied to the actions of the criminal investigative division, the IRS does have a tremendous amount of power.
Our system is set up to maximize their ability to do their jobs, sometimes at the expense of the individual taxpayer. This gives the IRS broad power to investigate, subpoena, demand records, assess penalties, file liens, seize assets, and yes — sometimes put people in jail.
So when faced with a situation where you are against the full force of the United States Government, you will want a skilled tax attorney who will stand up for your rights and get them out of your life as quickly as possible.
Brotman Law provides services and guidance in the following areas pertaining to the IRS:
- CPAs and Why Your First Line of Defense Might Not be Your Best One
- Why Our Tax System is Often Unfair to Taxpayers
- The IRS and Businesses
- Payroll Tax Matters
- Corporate Collections
- IRS Audits and Payroll Tax Matters
- Other Frequently Dealt With Collections Issues
- Offers in Compromise
- Innocent Spouse Relief
- Penalty and Interest Abatements
Our IRS Collections Practice
The IRS policy, when it comes to collections, is to come after people who are either not filing or not paying. Because of this, what you will find with the IRS is a series of actions that speeds up locating delinquent taxpayers, putting pressure on them, and essentially forcing them into compliance by beating them into submission. The laws and internal policies of the IRS are written to help them facilitate that process, even above being flexible to the taxpayer in any individual situation. The consequences are harsh, so an experienced advocate is often a good investment when fighting back against the IRS.
The IRS Collections department often takes a tough and unreasonable approach when you owe a liability to the government. Rather than express sympathy for your situation, they will use harsh standards and make unreasonable demands to get the most money out of you per month. The sacrifices that they ask you to make are often too much for most taxpayers to bear. In addition, taxpayers who do not agree to their demands are often subject to forced collection action — which means wiping out bank accounts, garnishing wages, and generally making it extremely difficult for you to live and support yourself.
Brotman Law eliminates the threat and shifts the focus from the desires of the government to the needs and future goals of our clients.We strategize and plan for financial and personal success, determining the cost of what it takes to maintain your standard of living and then working the IRS into that framework rather than the other way around. Our strategy minimizes client contact with the Service and the intrusion of the IRS into their daily lives. We aim to preserve your standard of living and help you to keep the things which matter most.
California is notoriously aggressive when it comes to tax audits and collections.
The state’s laws are designed to facilitate collections and give the state an advantage in making tax assessments and collecting money from those assessments; they are not designed to make things easy or fair on the taxpayer.
Coupled with a lack of understanding and resources, it’s nearly impossible for taxpayers to resolve California tax issues without losing a significant amount of money in the process.
Brotman Law brings years of seasoned expertise in high-dollar and high-stakes collection issues to shield your assets and income. Whether we reinitiate the fight with the examination division (through a re-audit) or engage directly with large dollar collections and/or Complex Account Recovery (CART), you can rest assured that we will provide you with the strongest possible defense.
Still not convinced that Brotman Law is right for your California tax issues? We can help you in the following areas:
- Why you should think about hiring a California Tax Attorney
- Why your CPA may not be the best person to handle your California Tax Issue
- Why your CEO/CFO/Controller/Bookkeeper is often a worse choice to handle your California Tax Issue
- Types California Business Taxes and Agencies involved
- Differences between California’s Tax Administration and the IRS
- Our California Tax Defense Practice
Our California Tax Defense Practice:
Tax administration at the state level and the resolution of tax issues is such a different animal than it is at the federal level. There are lots of tax attorneys and tax firms that focus on federal issues only and will not tackle state issues, and we think you can see why now. There is just so much difficulty in dealing with California and so many nuances that you cannot just look up in the case law. Because the system is looser and there is a fluidity to dealing with them, your defense on these matters must be just as fluid.
The chief reason our firm has had so much success with resolving tax issues with the state of California — we understand that success with them has less to do with the law than in understanding how it will be enforced.
In spite of all the challenges and extra levels of complexity that you have with the state, the same things that make them difficulties for us also handicap them in certain respects.
There are gaps in how tax laws are written, how they are supposed to be administered, and how they are really enforced. In addition, California has jurisdictional restrictions on their enforcement action and several other things that can give a taxpayer a competitive advantage when you are dealing with them.
Additionally, the relationships are stronger at the state level with our firm than at the federal level. Small numbers of agents mean that we get more interaction with them, their supervisors and their district heads. Often, we may have multiple cases with one audit group or collections unit going on simultaneously.
Other times, even with a new agent, we have familiarity with the supervisor, with other agents in their group, or normally with the people heading the office or overseeing it in Sacramento. The frequency of cases that we handle and our familiarity with these same groups have made the difference in several instances.
In their collections divisions, the ultimate goal of the state of California and the IRS is to collect revenue. It
In their collections divisions, the ultimate goal of the state of California and the IRS is to collect revenue. It
In their collections divisions, the ultimate goal of the state of California and the IRS is to collect revenue. It
In their collections divisions, the ultimate goal of the state of California and the IRS is to collect revenue. It should therefore be intuitive that they focus most of their efforts and take the strongest action against those with high balances. High balance does not always mean high net worth. Often times, individuals can be assessed high liabilities for a variety of reasons. Shockingly, the taxing authorities’ definition of high income earning (approximately $75,000) is not all that high. However, the higher above this income number you earn and the higher your liability, the bigger a target you are perceived to be.
Some of our firm’s biggest success stories and many of our most challenging cases fall into this category. We are seasoned in high dollar/high stakes collections issues and use our wealth of experience to the benefit of our clients. We have a long history of representing those with multi-million dollar liabilities and those in danger of being placed on the state’s 500 most wanted lists (https://www.ftb.ca.gov/aboutftb/delinquent_taxpayers.shtml, http://www.boe.ca.gov/sutax/top500.htm) .
Understanding that the state and the IRS have little sympathy toward perceived high income earning taxpayers, we place the utmost importance into devising a game plan and protecting our client’s prosperity. We work to shield assets and the ability to earn income from the tax agencies and come up with the plan that is going to best meet our client’s goals. Whether we reinitiate the fight with the examination division (through a reaudit) or engage directly with large dollar collections and/or Complex Account Recovery (CART), you can be rest assured that we will provide you with the strongest possible defense.
Despite recent cuts in IRS resources, criminal tax prosecutions and criminal tax investigations are on the rise. Those who face the scrutiny of the IRS Criminal Investigations Division, the Department of Justice Tax Division, or the California Attorney General’s Office need effective counsel who can help them navigate through the criminal investigations process and through the court system. Brotman Law understands that the most effective way to solve a potential criminal matter is to resolve it as early in the process as possible. When diplomacy fails, we have an excellent track record of negotiating plea deals and in obtaining favorable outcomes for our clients in court.
Brotman Law has been lauded by clients and by the government for outstanding work on behalf of those who choose to retain us. We maintain an excellent working relationship with many government offices and are known for our tough, steadfast advocacy on behalf of our clients. Our criminal practice dedicates itself to protecting our clients so that they receive the full presumption of innocence and that their rights are properly respected. We leverage our expertise to develop a strategic approach to solving your issue and to ensure that you get the strongest defense possible.
The Franchise Tax Board can be extremely difficult to deal with from a taxpayer standpoint whether through the examination division (audits) or through the collection division. Taxpayers become easily frustrated by California income tax procedures and the level of service received from the Franchise Tax Board. In addition, California has never been viewed as a particularly taxpayer friendly state. Tax procedures are geared to benefit the state and assist it in the collection of revenue. Additionally, California revenue officers and members of their Complex Account Recovery Team (CART) are known to take difficult stances with taxpayers during collection matters.
Unlike many tax firms, Brotman Law focuses on California state tax resolution specifically and navigates our clients through the most difficult of state tax issues. Neutralizing immediate threats, whether in an audit or during the collections process, is especially important because of the tendency of the Franchise Tax Board to take aggressive action when left unchecked. After the danger has passed, we work with the different levels of the Franchise Tax Board (often who do not communicate with each other) to put a resolution in place that best meets your goals. Our familiarity with the Franchise Tax Board helps us implement expedient resolutions to most California income tax problems.
The Employment Development Department is the largest tax agency in California. Although it handles a variety of functions (the Employment Development Department has roughly ten thousand employees and a annual budget of roughly twelve million dollars), one of its primary functions is the administration and collections of payroll tax for the approximately seventeen million workers in California. As with the IRS, failure by employers to make payroll tax deposits is perceived to be a huge problem for California and, as a result, the Employment Development Department can take far-reaching and severe actions against businesses that do not meet their obligations.
Brotman Law recognizes the seriousness of the business being involved in a tax dispute with or being investigated by the Employment Development Department. EDD agents are among the biggest threats to California businesses because of the approach they take toward collecting revenue for the state, often to the detriment of the taxpayer. It is important to walk into any dealing with the Employment Development Department with a strategy to achieve the goals and minimize any potential damage that an agent can cause. We use our “business first” approach to solving problems to neutralize risk and protect the ability of your business to earn and generate income.
In our professional experience, the Board of Equalization is the most aggressive and difficult agency to deal with in California. In audits, sales tax auditors use a myriad of complicated tricks and auditing techniques to trap taxpayers and increase their liabilities to the state of California. Unlike income tax audits, the Board’s calculations for determining unreported sales rely heavily on methods that are heavily variable. On the collections side, Board revenue personnel utilize extremely burdensome collection methods which can stifle a taxpayer’s business. Even more frightening is that Board personnel can and will shut down a taxpayer’s business entirely for unpaid sales tax liability.
Brotman Law takes the fight to the Board of Equalization. We utilize innovative and sound techniques to defeat liability and to make dealing with the Board as easy as possible. In audits, unlike many attorneys, we are skilled in statistically methods and models and use our advanced knowledge of statistics to defeat the Board procedures for assessing liability. Our proven methods have saved our clients millions in liability. In dealing with collections, we shield business and personal assets from collection officers and work to produce resolutions that mitigate even the toughest of collection agents.
Receiving an audit notice in the mail or being contacted by an IRS Revenue Agent is a scary experience for many taxpayers. Audits are intrusive, time consuming, and often designed to maximize the revenue that the government receives. The IRS audits those that it feels there is the biggest chance for an adjustment in their favor and can cost a taxpayer thousands, sometimes hundreds of thousands of dollars as a result. Additionally, some revenue agents will take advantage of taxpayers and use their superior knowledge of the tax code to trap you and/or open up multiple years.
Brotman Law immediately levels the playing field in an audit. During the initial consultation, we examine the return under audit along with any correspondence received and immediately work to come up with a game plan for effectively dealing with the auditor. We identify categories or items that may be high risk and develop a strategy with our clients for minimizing their biggest issues and moving them out of examination as quickly as possible. Preparation and presentation are the keys to success in any audit. IRS auditors may appear to wield a lot of power, but they are often no match for an attorney with a superior legal knowledge base and a keen understanding of IRS procedure. We utilize our tremendous experience in audits for the benefit of our clients and to yield exceptional results.
The IRS Collections department often takes a tough and unreasonable approach when you owe a liability to the government. Rather than express sympathy for your situation, they will use harsh standards and make unreasonable demands in order to get the most money out of you per month. The sacrifices that they ask you to make are often too much for most taxpayers to bear. In addition, taxpayers who do not agree to their demands are often subject to forced collection action, wiping out bank accounts, garnishing wages, and generally making it extremely difficult for you to live and support yourself.
Brotman Law eliminates the threat and shifts the focus from the desires of the government to the needs and future goals of our clients. We strategize and plan for financial and personal success, determining the cost of what it takes to maintain your standard of living and then working the IRS into that framework rather than the other way around. Our strategy minimizes client contact with the Service and the intrusion of the IRS into their daily lives. We aim to preserve your standard of living and help you to keep the things which matter most.
There are times when a tax debt becomes insurmountable given a person’s financial circumstances or where there is a serious doubt as to the liability owed. Although the IRS has created a program to settle a person or business’s tax liability (Offer in Compromise), it has placed stringent restrictions on the criteria that it uses to determine offer acceptance. In addition, IRS personnel are trained to screen offers in compromise and reject or modify offer amounts, which often times make them unworkable for the taxpayer. Taxpayers are often confused or angry at the Service for what seems like an unfair process and the fresh starts promised seem unobtainable.
Brotman Law helps to dispel the mystery from the offer in compromise process. In contrast to many firms, we prescreen offers using the same formulaic methods that the IRS collections divisions uses for acceptance and only submit offers in compromise that we feel have a high chance of acceptance. If a client comes to us and presents circumstances that we do not believe will be approved, we formulate a strategy and work with them to present an offer in compromise that will be acceptable to the IRS. Additionally, we always strive to do what we can to maximize the client’s tax savings and provide with the fresh start that they deserve.
The IRS generally holds both husband and wife liable for the tax liability shown on their joint income tax return. Under normal collections protocol, since both spouses are held jointly and severally liable for the tax liability shown on the return, the IRS will take enforcement actions against both of them and they are held equally responsible for the liability. Innocent spouse relief, although available through the Service, is the exception rather than the rule. This is true in circumstances where only one spouse earned the income associated with a tax liability or in cases of divorce where one spouse has agreed to accept liability for any taxes owed. IRS collections does not honor 3rd party divorce agreements.
You should not be punished for the mistakes or wrongful conduct of your spouse/current spouse. Innocent spouse situations are often very fact specific and Brotman Law takes a deep analytical approach to solving the problem. We analyze the three available avenues of relief that are available through the innocent spouse program and determine which method is going to best meet your needs. The goal is defense. We work hard to preserve your quality of life and your standard of living. Furthermore, we recognize the effect that divorce or marital separation situations affect your normal life and plan for short term needs as well as long term goals.
If you have ever owed a balance to the IRS and received a statement from them reflecting the total that is owed, you know exactly how much that penalties and interest can add to that liability. Many of our clients are perfectly agreeable to paying the tax that is owed; however, penalties and interest associated with the account can often double or triple that liability. The IRS does not differentiate between the balance that is owed for tax and the balance owed for interest and penalties. It will take the same collection actions to make sure that the total liability is paid in full regardless of the taxpayer’s circumstances.
Brotman Law has had a great track record of success in getting interest and penalties abated through the Penalty Appeals Service Coordinator and through the IRS Office of Appeals. We understand the finer legal points and other criteria that go into the IRS’s determination on whether or not to abate penalties and interest and craft abatements that hit on several of these major issues. Our background the case law as well the more recent court decisions and our knowledge of internal procedure allow us to go much further on the issues presented and we are often successful at getting abatements accomplished on the first attempt.
Whether at the IRS or the state level, corporate collection issues are often the most challenging and most difficult matters to resolve. Both entities take a very aggressive approach toward corporate collections and often times will jeopardize the health of the business by being overly aggressive. Even though it seems counterintuitive, the “killing the goose that lays the golden eggs” strategy is often the one that collection agents employ by levying business operating accounts and accounts receivable. Often times, they will show no remorse toward your business or your ability to generate a living and provide for you and your employees.
One of the hallmarks of our practice has been in defending businesses against the wrath of the federal and state governments. It takes a business owner to know a business owner and Brotman Law takes a “business first” approach to solving tax problems. Recognizing that businesses are unique, we understand that the goal is not just to protect the business assets, but also to preserve cash flow and not let the tax authorities inhibit growth. We deal with any and all immediate threats to the business and then work to put together a plan that leads to long term business success as well as that will satisfy the taxing agencies.
For some businesses that rely heavily on contract labor, the threat of an IRS or Employment Development Department audit is serious and can be potentially crippling to a business. Because of the amounts in controversy, liabilities at the end of payroll tax or independent contractor audits can be in the hundreds of thousands if not millions depending on the size of the business. For the taxation agency revenue agents, often these inquiries will span multiple years and investigations are conducted with the goal in mind of generating revenue for the federal government or the state. In addition, the penalties associated with these matters can be significant.
Determining payroll tax liability and whether a worker is an independent contractor or an employee is a multi-faceted inquiry. Luckily, Brotman Law understands the subtleties involved in the analysis and will work to present the facts in the light that is most favorable to the client. Our knowledge of the law and of the federal/state audit procedure gives us the upper hand in the majority of cases with the tax agencies. We often know the direction of their investigation before they take action, which allows us to plan better and to navigate our clients through the audit process with as much ease and simplicity as possible.
One of the hot areas of enforcement for the IRS is in the area of undisclosed foreign assets and foreign bank accounts. Through FATCA, the IRS has been working to collect a treasure trove of information from foreign financial institutions and information sharing between these institutions and the IRS is at an all-time high. As such, the IRS has been enforcing a series of penalties, audits, and other actions designed to target those not reporting foreign income or disclosing foreign assets. Even in cases where the mistakes involved are insignificant, the IRS has been known to heavily punish taxpayers for non-compliance by issuing a series of draconian penalties.
Brotman Law understands the complex nature of foreign asset holdings, including determining the value of these assets due to currency fluctuations and other factors. We work to analyze an immediate risk to the client as a result of non-compliance and advocate for a solution that is going to preserve assets and well as to mitigate any potential liability. Whether through the Streamlined Voluntary Disclosure Program or through any number of avenues that may be available to the client, we take a comprehensive approach toward minimizing the risk and cost associated with disclosure to the Service.
As a benefit to our clients, we provide assistance in dealing with a variety of business and real estate matters including business sales and purchases, lease disputes, lease negotiations, corporate document drafting, corporate governance, entity formation, and other business and real estate issues. Mr. Brotman was a wide range of experience in dealing with these issues both as an attorney and as a business owner. We bring a practical approach to these types of issues and realize that ultimately legal decisions are business decisions. We believe strongly in the cost benefit rule and work to provide solutions that make sense from a business standpoint as well as from a legal and tax perspective.
As former corporate counsel for two major Southern California corporations, Mr. Brotman excels at quarterbacking and providing legal leadership for companies and businesses, who may not have the benefit of in house general counsel. His wide range of experience has been valuable at many levels and why our firm excels at working with small and mid-size businesses. We work on creating value for our clients with all the legal solutions that we implement with the chief objective in mind of making them become more profitable, minimizing their risk, or reducing the cost of legal services in the future. We realize that many business owners do not have a “legal expense” category on their profit and loss statement. That is why we serve as a guide post for them in all growth cycles and phases of their business.