What’s Happening
Rarely has a potential change in tax law affecting so few taxpayers attracted as much attention as California’s 2026 Billionaire Tax Act. By definition, the proposed legislation, which takes the form of a ballot initiative subject to a popular vote, only applies to the rarified demographic of taxpayers with a net worth of
Latest from California Residency Tax Planning
Nonresidents Working Temporarily in California
What’s Happening?
The digital economy has allowed increasing numbers of nonresidents to work remotely for California firms without becoming California residents, and even without paying California income taxes, in some cases. At the same time, more and more nonresidents find themselves being offered lucrative temporary employment in California. This is particularly true for software
Are 40% of Californians on the Verge of Leaving the State? Not Really, But a New Poll Tells a Tale of Discontent
What’s Happening
A recent poll of adult California residents shows the vast majority are satisfied with the state, but about 40% are considering leaving. Only 18% of those say they are considering a move “very seriously.”
The major reason given for a possible move is economic: over 60% say living expenses are motivating their planning.
The ING Fling Dinged: California Closes the Incomplete Gift Tax Trust “Loophole”
The Issue
After years of wrangling with the issue, California has just enacted legislation to eliminate a state income tax savings strategy some California residents have pursued by establishing a non-grantor gift trust (ING). These trusts are often called WINGs, DINGs, and NINGS, a reference to the three states that first marketed them: Wyoming, Delaware,
Moving to California After a Liquidity Event: A New FTB Case Highlights All the Mistakes Nonresidents Can Make
The Case
A recent case from California’s Office of Tax Appeals brings some clarity to how strictly California dates a change of residency for income tax purposes when a nonresident claims to have moved to California shortly after a liquidity event. The case, Appeal of Housman, OTA Case No. 18010200 (November 2022), in some ways
California’s “Integrated Nonfiler Compliance” System: How it Affects Nonresident Taxpayers
The Issue
If you’re in the habit of reviewing California residency cases (and only a tax attorney specializing in the field or a masochist would be), you will occasionally come upon a reference to the Franchise Tax Board’s “Integrated Nonfiler Compliance” system, sometimes called the INC program. The court opinion will mention that the audit
California’s 4600 Notice “Request For Tax Return” – The Definitive Guide for Nonresidents
The Issue
Nonresidents who own vacation homes, business interests, financial accounts, or have other significant contacts in California can receive a notice from the Franchise Tax Board, California’s tax enforcement agency, demanding they file a tax return or explain why they aren’t required to. The official notice number is 4600 (you can find the
Criminal Tax Fraud in California Residency Cases: Will the Trump/Weisselberg Indictment Give the FTB Ideas?
What’s Happening?
There’s a noteworthy residency-related Easter egg in the criminal tax fraud indictment against the Trump Organization and its CFO, Allen Weisselberg. The complaint includes the charge that Weisselberg fraudulently failed to file tax returns as a New York City resident, thus evading the municipality’s income tax on the city’s inhabitants. Monetarily, it’s
Liquidity Events, the Interim Home Problem, and Determining the Date for Changing California Residency: A New FTB Case Sheds Some Light
The Case
A new case from California’s Office of Tax Appeals brings some clarity to how strictly California dates a change of residency for income tax purposes when a resident moves out of state shortly before a liquidity event. The case, Appeal of J. Bracamonte, OTA, Case No. 18010932 (May 2021), emphasized the importance
Nonresidents Working Remotely for California Businesses: Taking “The Sting” Out of California Income Taxes
The Issue
With the rise of ecommerce, advanced telecommunications, and the new prevalence of remote work due to the COVID emergency, more and more people are choosing the option of living in one state while working for an employer in another, without ever setting foot at the employer’s place of business. The possibilities for