Business Owners Need to Be Vigilant in Order to Protect Their Rights, Says CA Law Firm Brotman Law 

SAN DIEGO, July 30, 2024 /PRNewswire/ -- California tax agencies, such as the Employment Development Department (EDD) and the California Department of Tax and Fee Administration (CDTFA), have raised the stakes against California taxpayers. Although tax collection disputes have been resolved administratively in the past, business owners may now find themselves embroiled in litigation against the California Department of Justice.

Administrative tax agencies in California are set up to administer and collect the taxes owed to the state. Generally, when an individual or business owes taxes to the state of California, they would work with that agency to set up a payment plan, submit an Offer in Compromise, or reach another agreed-upon resolution. This is especially true for smaller liabilities of less than one million dollars because it is more efficient in terms of time and cost for the state to handle these matters without going to court. Judicial resolutions in tax cases are generally only used in high-stakes tax cases or where there is some major risk of loss to the state. However, because of the general backlog in the California court system and the formalities involved with court, resolutions take longer to reach for both parties and go before a judge who may not have a lot of experience with tax cases.

However, California has recently shown more willingness to pursue judicial resolution against taxpayers, even those who owe relatively small amounts. The tax agencies in California, represented by the Civil Division of the California Department of Justice, have begun to file more lawsuits against individual and business taxpayers. Once served with a copy of a judicial summons and complaint, taxpayers are left with two options: hire an attorney to represent them or go it alone in court.

"It is very unfortunate that California has chosen to seek judicial resolution against taxpayers for something that really should be resolved administratively. Taking tax collection matters to court, especially against taxpayers who owe taxes and may be financially weakened, creates an unfair advantage for the state," says owner and managing attorney of Brotman Law, Sam Brotman. "Taxpayers may not have tens of thousands of dollars to litigate a tax issue to its conclusion, whereas the California Department of Justice has a seemingly unlimited budget of time and money to prosecute the matter. Tax collection issues generally do not have a significant dispute in terms of material facts and, as such, there is no reason for the courts to get involved when a simple financial arrangement is generally all that is needed."

In spite of this, taxpayers should seek the advice of a qualified tax attorney rather than choosing to go it alone in Superior Court. Litigation has rules and is complicated for the average layperson, who may be unfamiliar with how the litigation process works. However, the worst thing that the taxpayer can do is not respond to California's lawsuit in a timely manner. Failing to respond to a lawsuit will trigger a default and will result in a judgment against the taxpayer. Once a court has issued a judgement, it is often too late to contest the merits and/or work out an amicable payment plan with the state of California. Further, if California was aggressive in pursuing a lawsuit against a taxpayer, they will likely be even more aggressive in pursuing a judgment.

Brotman Law is a national tax law firm headquartered in San Diego, California. The firm has been successfully navigating audits with California tax issues for over 10 years, finding ways to produce the best possible result for clients even in situations where matters are incredibly nuanced or difficult. Brotman Law is available to speak with any business owner or individual who owes taxes to the state of California and can be reached on their website.    

Contact:  
Aliyah Yates
Marketing Manager
Brotman Law 
(619) 378-3138
ayates@sambrotman.com 

About Brotman Law 

Brotman Law is an established team of law professionals that have been helping clients and their businesses navigate the intricacies of tax law for over 10 years. The firm has represented hundreds of California taxpayers against the Franchise Tax Board, Employment Development Department, and the California Department of Tax and Fee Administration. Brotman Law is dedicated to providing every client with exceptional legal services accompanied by a compassionate approach that is unheard of in the industry. Beyond just successes with the California tax agencies, the Brotman Law team is singularly united by genuine empathy for all clients, a strong desire to help, and never-say-quit tenacity that propels the firm to the best possible results on their clients' behalf. For more information or to book a consultation with the Brotman Law team, visit SamBrotman.com or call (619) 378-3138. 

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SOURCE Brotman Law

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