California Tax Defense — San Diego
San Diego Tax Attorney
Table of Contents
A san diego tax attorney handles disputes with the IRS and California tax agencies as legal matters, not accounting problems. The distinction is practical: tax audits, collection actions, criminal investigations, and agency appeals are adversarial proceedings with legal rights and formal procedures. They require someone who can appear on your behalf, assert privilege where it applies, and understand when what looks like a civil dispute has exposure that goes beyond money.
What I do is represent people through those proceedings — and, when possible, keep things from reaching the worst outcomes in the first place. If you have received a notice from the IRS or a California agency and want to understand what you are actually dealing with, a free 15-minute call is a good place to start.
What a San Diego Tax Attorney Handles
The core of a tax law practice in San Diego covers four jurisdictions: the IRS federally, and the FTB, EDD, and CDTFA at the California state level. Each has its own audit authority, collection tools, and administrative appeals process. A serious tax matter in San Diego can involve any combination of them — an IRS audit of a business owner’s personal return can run parallel to an EDD worker classification audit of the same business, for example, with FTB making its own inquiry once the IRS adjusts the federal return.
Federal tax matters — IRS audits, IRS collections, criminal referrals, Offers in Compromise, and tax court petitions — are handled under Title 26 of the Internal Revenue Code and federal regulations. Those proceedings are consistent across the country, but the personnel, the office, and the local procedures matter in practice. The IRS San Diego Field Office handles examination and collection cases for San Diego County taxpayers. Federal criminal tax cases prosecuted out of San Diego go through the U.S. District Court for the Southern District of California at 333 W. Broadway.
California state tax matters involve separate agencies. The FTB administers personal and corporate income tax; EDD handles payroll tax and worker classification; CDTFA covers sales and use tax, as well as a range of industry-specific excise taxes. Each has its own administrative appeals process before final assessment — the Office of Tax Appeals (OTA) for FTB and CDTFA, and the CUIAB for EDD. Knowing those internal appeals structures is where representation tends to matter most.
Federal Tax Issues in San Diego
IRS Audits
An IRS audit is the agency’s examination of whether your federal tax return accurately reflects what you owe — and the outcome of that examination depends heavily on how it is handled from the beginning. The IRS San Diego Field Office conducts field examinations for San Diego-area taxpayers. Correspondence audits are managed through the campus system. Office exams typically take place at the field office or, with proper notice and arrangement, can be conducted through your representative’s office.
The type of audit matters. A correspondence audit triggered by a single line item — a charitable deduction, a Schedule C expense — is a different matter from a multi-year field examination with a revenue agent reviewing your books. The latter can develop into a fraud referral if the examiner finds patterns that suggest willful underreporting. The Form 4549 — the Revenue Agent’s Report — is what formalizes the IRS’s proposed changes. From there, you have 30 days to appeal through Appeals or agree. A 90-day letter (Notice of Deficiency) follows if the matter goes unresolved, and from there the Tax Court is the primary avenue to contest the liability before paying.
I handle IRS audits at all levels — correspondence audits, office exams, field examinations, and eggshell audits where there is potential criminal exposure running alongside the civil exam. See our full page on IRS audit defense.
IRS Collections — Liens, Levies, and Offers in Compromise
Once the IRS has assessed a tax liability, it has ten years from the date of assessment to collect — the Collection Statute Expiration Date (CSED) under IRC § 6502. During that window, the IRS can file a federal tax lien (Form 668(Y)), issue a bank levy (Form 668-A) or wage garnishment (Form 668-W), and in some circumstances seize assets. For San Diego taxpayers, those actions come through the IRS San Diego Field Office’s collection division.
Resolution options depend on your financial situation. An Offer in Compromise (OIC) is a settlement with the IRS for less than the full amount owed — the IRS accepts when your Reasonable Collection Potential (RCP), calculated on Form 433-A (OIC), supports the offered amount. A partial-pay installment agreement pays down the balance at a monthly amount below full payment, with the remainder potentially expiring at the CSED. Currently-not-collectible (CNC) status pauses collection while your financial situation remains below IRS Collection Financial Standards. A Collection Due Process (CDP) hearing, requested on Form 12153 within 30 days of a levy notice, is the formal checkpoint to contest collection and propose alternatives.
Most OICs get rejected because the financial analysis was not done correctly before filing — the IRS keeps the 20% non-refundable deposit regardless of outcome. The right starting point is a realistic RCP analysis before filing anything. I do that analysis in-house, and I represent San Diego clients through the full collections process. See our page on IRS collections and tax debt resolution.
IRS Criminal Tax Referrals
When IRS Criminal Investigation (CI) opens a case, the matter is no longer a civil dispute — it is a federal law enforcement investigation with the potential for prosecution by the DOJ Tax Division. CI special agents are armed federal officers with arrest authority; their conviction rate historically runs above 90%. San Diego falls within the IRS CI Los Angeles Field Office’s coverage area for Southern California.
Cases that start as IRS audits can become CI referrals if the examiner documents what looks like willful fraud — substantial unexplained income, two sets of books, fabricated deductions. An eggshell audit is the name for a civil examination where criminal exposure is already present but CI has not yet been formally involved. The handling of an eggshell audit is entirely different from a routine exam: the goal is to resolve the civil matter without generating a criminal referral, which requires understanding exactly what CI would see as evidence of willfulness and structuring the audit response accordingly.
If a CI special agent has contacted you, coordinate with a criminal tax attorney before responding to investigators or producing any documents. I handle CI defense from the preliminary investigation phase through DOJ Tax Division review. See our practice page on IRS Criminal Investigation defense.
FBAR and International Tax
San Diego has significant cross-border economic activity with Mexico and a large military population, both of which generate foreign financial account reporting obligations under FBAR requirements. The Report of Foreign Bank and Financial Accounts (FBAR, FinCEN Form 114) is required from any U.S. person with foreign financial accounts whose aggregate value exceeds $10,000 at any point during the year. Penalties for willful failure to file are severe — up to the greater of $156,493 (adjusted annually for inflation) or 50% of the highest account balance per violation per year. The IRS enforces FBAR through its examination function, and FBAR issues frequently surface during an IRS income tax audit when the revenue agent identifies foreign income or account activity.
For San Diego residents with accounts in Mexico, Canada, or elsewhere — or military families who maintained accounts overseas during foreign postings — the FBAR analysis is separate from the underlying income tax question and needs to be resolved on its own terms. The Streamlined Filing Compliance Procedures are a path to catch up on delinquent FBARs with reduced penalties for qualifying taxpayers, but whether they apply turns on whether the IRS characterizes the non-compliance as willful or non-willful. That determination is both legal and factual, and it benefits from attorney involvement before any election is made. The wrong choice between the domestic and foreign offshore streamlined tracks, or between streamlined and the OVDP framework, has permanent consequences. See our practice page on FBAR attorney representation.
California State Tax in San Diego
FTB Audits and Collections
The California Franchise Tax Board audits personal income tax and corporate income tax returns, and San Diego County residents are subject to FTB examination the same way Los Angeles or Bay Area taxpayers are — California taxes its residents on worldwide income. FTB audit selection can be triggered by a federal adjustment (the IRS audits your return and FTB receives a copy of the change), by a Schedule CA inconsistency, or by a residency question.
Residency audits are a particular issue for San Diego taxpayers who spend time in Nevada, Arizona, or elsewhere and claim to have changed domicile. California’s FTB has an audit unit specifically focused on high-income individuals who claim non-residency — the burden of proof to establish a change of domicile is on the taxpayer, and the FTB looks at a specific set of factors: location of closest contacts, location of real property, voter registration, driver’s license, and the “closest contacts” analysis under California tax code. Getting this wrong means paying California taxes on years of income that should have been taxed at a lower rate elsewhere.
FTB disputes that cannot be resolved at audit go to the Office of Tax Appeals (OTA). I represent San Diego clients at the audit, appeals, and collections level for FTB matters. See our full page on FTB audit defense.
EDD Payroll Audits — Worker Classification
California’s Employment Development Department has audit authority over payroll taxes, and its primary audit focus for San Diego businesses is worker classification — the question of whether individuals paid as independent contractors should have been treated as employees under California law. The standard in California under AB 5 is the ABC test: a worker is an employee unless the hiring entity can demonstrate (A) the worker is free from control, (B) performs work outside the usual course of the business, and (C) is customarily engaged in an independently established trade.
An EDD reclassification audit can result in assessment of all payroll taxes — employer-side FICA, SDI, UI — going back multiple years, plus penalties and interest. For industries common in San Diego — construction, tech staffing, healthcare, real estate services — the misclassification exposure can be substantial. EDD audits also run parallel to IRS examinations in some cases, where the federal and state agencies share information.
I represent San Diego businesses in EDD audits and appeals. The administrative appeal goes to the California Unemployment Insurance Appeals Board (CUIAB). See our practice page on EDD defense.
CDTFA Sales Tax Audits
The California Department of Tax and Fee Administration (CDTFA) administers sales and use tax in California, and CDTFA audits are common for San Diego retailers, restaurants, contractors, and businesses that sell both taxable and exempt goods. A CDTFA audit begins with a Notice of Determination and typically covers three years, though the CDTFA can go back eight years for fraud or non-filing. The audit methodology often involves statistical sampling — the CDTFA selects a sample period and extrapolates the deficiency across the full audit period, which can produce assessments that bear little relationship to the actual underlying liability if the sample is not representative.
CDTFA disputes not resolved at the audit level go to the OTA for formal appeal. I represent San Diego clients in CDTFA sales tax audits, protests, and OTA appeals. See our practice page on CDTFA defense.
San Diego Tax Issues by Industry
San Diego’s economy has a concentration of industries that generate recurring tax problems — and those industries track the enforcement priorities of the IRS, FTB, EDD, and CDTFA. Knowing what typically triggers audits in your industry is part of the defense.
Biotech and Life Sciences
San Diego’s biotech corridor — Torrey Pines, La Jolla, Sorrento Valley, Rancho Bernardo — produces consistent IRS audit issues around equity compensation, R&D tax credits under IRC § 41, and cost-sharing arrangements between related entities. Executives and key employees of San Diego biotech companies face income reporting questions around stock option exercises, RSU vesting, and California’s sourcing rules for equity income earned during periods of part-year residency. When a federal income tax audit covers those items, an FTB parallel examination typically follows. The ERC credit — claimed by San Diego biotech companies for 2020 and 2021 — is also a current IRS audit focus. See our page on ERC audit defense.
Real Estate
San Diego real estate — residential and commercial — produces IRS audit issues around 1031 exchanges, depreciation recapture under IRC § 1250, passive activity loss limitations under IRC § 469, and the classification of real estate activities as trades or businesses. FTB audits of San Diego real estate investors commonly involve the character of gain on sale and California’s sourcing rules for real property transactions. Short-term rental activity in San Diego — Airbnb and VRBO properties in Pacific Beach, Mission Hills, and beach neighborhoods — generates CDTFA sales tax exposure in addition to city-level transient occupancy tax (TOT), which is administered separately at the municipal level.
Construction and Contractors
EDD audits the San Diego construction industry for worker classification more aggressively than most sectors. Subcontractor arrangements that have been standard practice in San Diego construction for years may not pass the ABC test under AB 5, and an EDD reclassification reaches back multiple years and assesses the full payroll tax burden — employer-side FICA, SDI, UI — for every worker reclassified. CDTFA simultaneously audits San Diego contractors on the taxable-vs.-non-taxable line between materials and labor. That line depends on contract structure — lump-sum vs. materials-and-labor — and getting it wrong at project inception creates CDTFA exposure that surfaces years later at audit.
Hospitality and Food Service
San Diego’s hotel, restaurant, and catering sector faces CDTFA sales tax audits on taxable food and beverage sales, and EDD audits on tip compliance, service charge treatment as wages, and independent contractor claims for delivery and catering staff. For larger San Diego hotels and resorts, CDTFA sales tax and city-administered TOT run as separate compliance obligations. EDD has specific scrutiny for the restaurant and hospitality sector around tipped-wage employees who are sometimes misclassified as independent contractors — particularly for event catering, private dining, and food delivery operations.
Military Families
San Diego’s large active-duty and veteran population generates specific tax issues: California’s treatment of military pay for residents vs. non-residents, the Servicemembers Civil Relief Act (SCRA) protections for income tax purposes, and foreign account reporting for service members who maintained accounts during overseas assignments. The FTB’s analysis of military residency — where California’s “closest contacts” test intersects with SCRA protections — requires careful handling. FBAR obligations for accounts held during foreign deployments are separate from the income tax question and need to be addressed independently.
Why Local Representation Matters
Being based in San Diego is not a credential — but it is a practical reality that affects how I work with San Diego clients.
I know the IRS San Diego Field Office. The revenue agents and revenue officers who work there have patterns — some are methodical and respond well to organized document production; some are more aggressive and need a firmer response early. That is not something you learn from a website; it comes from having represented clients before those agents over years. The same is true for CDTFA auditors and EDD field representatives who handle San Diego cases out of the local district offices.
For federal court matters, San Diego falls within the jurisdiction of the U.S. District Court for the Southern District of California at 333 W. Broadway. Federal criminal tax cases brought in San Diego are prosecuted in that court. For U.S. Tax Court petitions, the nearest regular session city is Los Angeles — Tax Court sessions are held in Los Angeles, and I appear there for San Diego clients whose cases go to trial or need hearings before the Court.
There is also the attorney-client privilege point. A CPA who is not an attorney cannot invoke privilege. Anything your CPA knows about your matter — your unreported income, your account structure, the advice you were given — can be subpoenaed in a civil or criminal proceeding. When I take on a case, communications with me are protected. If I need to work with an accountant, I can retain them under a Kovel arrangement that extends privilege to their work product. That matters in any case with complexity, and it matters more when criminal exposure is in the picture.
The practical point: you want someone who has handled cases like yours, knows the local agencies and their people, and can be in the room — or on the phone — with the right authority when it counts. That is what local San Diego representation means in practice.
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About Sam Brotman
Samuel C. Brotman, Esq., CPA, is the managing attorney of Brotman Law, a San Diego tax law firm he founded in 2013. He holds a J.D. from California Western School of Law, an LL.M. in Taxation — the postgraduate tax law degree — and a California CPA license. The combination of attorney, LL.M., and CPA in a single practitioner is uncommon, and it is directly relevant to the kinds of cases the firm handles.
Since 2013, Brotman Law has represented over 400 clients in IRS audits and related tax matters and has resolved more than $1B in taxes, penalties, and interest on behalf of clients. Those numbers come from real cases — IRS field examinations closed favorably, Offers in Compromise accepted, criminal investigations resolved without charges, and collection cases closed through negotiated agreements. The firm is focused exclusively on tax — this is not a general practice that also handles tax matters on the side.
- California State Bar — licensed attorney, admitted to practice in all California courts, including U.S. District Court for the Southern District of California; member of the State Bar’s Tax Section
- Certified Public Accountant (CPA) — California-licensed CPA; the dual attorney-CPA credential is uncommon at the managing-attorney level
- J.D., LL.M. in Taxation, MBA — the LL.M. in Taxation is the specialized graduate degree for tax lawyers, beyond the J.D.
- IRS Representation Authorization — authorized to represent clients before all IRS divisions under Form 2848, including Examination, Appeals, and Collection
- San Diego office since 2013 — 12636 High Bluff Drive, Suite 400, San Diego, CA 92130
If you want to talk through a tax matter — IRS, FTB, EDD, or CDTFA — the free 15-minute call is the right place to start. We can figure out what you are actually dealing with and whether it makes sense to work together.
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Frequently Asked Questions
Do I need a San Diego tax attorney, or can I use one in Los Angeles?
You can use a California-licensed tax attorney anywhere in the state — the license and a Form 2848 Power of Attorney authorize representation before the IRS and California agencies regardless of office location. That said, there are practical reasons to work with a San Diego attorney for San Diego matters. Sam is based here, knows the IRS San Diego Field Office agents, and can appear locally without travel cost or delay. For U.S. Tax Court proceedings, the nearest session city is Los Angeles — Sam handles those appearances as part of the matter.
What IRS office covers San Diego?
The IRS San Diego Field Office handles examination and collection matters for San Diego County taxpayers. IRS Criminal Investigation covers San Diego through the Los Angeles Field Office, which handles Southern California. For federal court tax matters, San Diego falls within the U.S. District Court for the Southern District of California at 333 W. Broadway, San Diego. Tax Court petitions from San Diego taxpayers are heard at the Los Angeles Tax Court session, the nearest regular session city.
How do I find the right San Diego tax lawyer for an IRS audit?
Look for a California Bar attorney with an LL.M. in Taxation and, ideally, a CPA credential — that combination means your attorney can handle the legal proceedings and the financial analysis in the same engagement, with attorney-client privilege protecting the work. Ask specifically about the type of audit you are facing: correspondence, office exam, or field examination. Sam Brotman holds a J.D., LL.M. in Taxation, and California CPA license, and has represented over 400 clients in IRS audits since 2013. Book a free 15-minute call to talk through your situation.
What does a San Diego tax attorney charge?
Tax attorney fees depend on the type and complexity of the matter. A correspondence audit resolved through document production costs less than a multi-year field examination, which costs less than a criminal tax defense engagement. Factors include the number of tax years at issue, the dollar amount in dispute, whether the matter involves criminal exposure, and which agencies are involved. Brotman Law offers a free 15-minute call to discuss your situation — for most matters, we can give you a realistic fee range after that conversation.
Can a San Diego tax attorney help with an FTB or CDTFA audit?
Yes. Sam represents San Diego clients before the FTB, CDTFA, and EDD in addition to IRS matters. FTB audits in San Diego commonly involve income reporting disputes and residency questions — California taxes residents on worldwide income, and the FTB examines high-income individuals who claim to have changed domicile. CDTFA audits cover sales and use tax for retailers, restaurants, and contractors. EDD audits focus on worker classification under the AB 5 ABC test. Each has its own administrative appeals process, and Sam handles those proceedings through to the Office of Tax Appeals or CUIAB as needed.
What are the most common tax problems for San Diego business owners?
The most common IRS audit triggers for San Diego businesses are Schedule C or S-corporation returns with high income and significant business deductions, payroll tax discrepancies, and R&D credit claims. California agency audits most frequently involve worker classification (EDD under the AB 5 ABC test), sales and use tax (CDTFA for retailers, restaurants, and contractors), and FTB income tax following a federal adjustment. In San Diego specifically, construction, hospitality, real estate, and biotech are the industries with the most recurring audit activity across all four agencies. If you are in one of those industries and have a complex return, proactive review before an audit notice arrives tends to produce better outcomes than a reactive defense.
Does California FTB audit San Diego residents who move to Nevada?
Yes. The FTB actively audits high-income taxpayers who claim to have changed domicile from California to Nevada. San Diego is a common source for these audits — many residents purchase Nevada property or establish Nevada ties while keeping their San Diego home, professional licenses, and family connections. California’s analysis focuses on “closest contacts” — the location of real property, employment, family, and social connections — not just the count of days per state. The burden of proof is on the taxpayer to establish a change of domicile, and the FTB has access to California DMV records, property tax records, and voter registration to challenge the claim. Getting this wrong means paying California income taxes on years of income that should have been taxed elsewhere. See our page on FTB defense.
What is the difference between a correspondence audit and a field examination?
A correspondence audit is handled by mail — the IRS sends a notice requesting documentation for a specific item on your return, and you respond by providing records. Most correspondence audits are resolved without in-person contact and address a single issue. A field examination is conducted by a revenue agent who reviews your books and records in person, typically at your representative’s office in represented cases. Field exams cover multiple years and multiple issues, run longer, and are more likely to develop into broader investigations. An eggshell audit is a field examination where potential criminal exposure is already present alongside the civil exam — and the handling is substantially different from a routine field exam, because the goal is to resolve the civil matter without generating a criminal referral to IRS Criminal Investigation. See our full guide on types of IRS audits.
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