Residency and Sourcing

California is among the highest tax rate jurisdictions in the country. As a result, individuals and companies are leaving California in increasing numbers for lower tax states. But just because one intends to leave does not mean that one does so in the eyes of the law. And even if one legally leaves California, the Franchise Tax Board—recognized as one of the world’s most aggressive tax agencies—may disagree. The consequence can be years of back taxes, interest, and onerous penalties. Dakessian Law has a team of experts in California residency disputes with the Franchise Tax Board. And as with the other California tax matters we handle for our clients, our results speak for themselves.

 

Individuals

Dakessian Law has successfully represented countless high net worth individuals at all levels of the administrative process and in court regarding disputes over their residency status, as well as issues involving the sourcing of major items of income. Our client roster includes business leaders, entrepreneurs, venture capitalists, and professional athletes. Our team of lawyers has been entrusted with handling the largest and most complex residency disputes, including one for an entrepreneur involving over $100 million in dispute. Our win before the State Board of Equalization on behalf of former NFL star Keyshawn Johnson against the Franchise Tax Board (which was affirmed by the Office of Tax Appeals) is just one example of how we go to the mat for our clients—and win. (To see us in action, click here and go to timestamp 1:42:19.) Because we know how these matters play out, we are also tax planning experts in residency and sourcing matters. If you plan to leave the State of California, please make sure to contact us and get the benefit of our decades of experience and success in handling these matters. We can help increase the chances of a successful outcome in case you are audited. And we are there at the front lines to defend you in case the Franchise Tax Board overreaches after a residency audit.

Corporate (Commercial Domicile)

Our expertise in this area also extends to commercial domicile matters. If you plan to move your company outside California or to set up new entities in other states, please contact us. Once again, our track record of success in these matters is an asset we put to work for our clients. For example, in Daniel V, Inc. v. Franchise Tax Board, we took the FTB to trial in a commercial domicile matter involving a Nevada investment company. Our lawyers not only obtained a judgment ordering refund of every penny of the $2.5 million in dispute but made the FTB pay the taxpayer’s attorneys’ fees in the amount of $1.2 million. (See what the trial court said in making the FTB pay these fees: Certified Court Transcript). Contact us if you have an active commercial domicile dispute or need tax planning advice to move your company.