If you've recently moved out of California, or are contemplating a move from the state, you should know that California's Franchise Tax Board (FTB) has a large dedicated team devoted to supporting the state's highly aggressive residency audit practices. The single most common trigger for an FTB residency audit is changing your filing status to nonresident while continuing to own your California home. Of course, there are many legitimate reasons to continue to own your California home even though no longer a tax resident of the state, but FTB has embraced this as the first best indicator that they might be able to claw back tax revenue on a residency issue.
FTB has the ability to access a significant, but still limited, amount of confidential data. This includes real property ownership records, driver's license data, and homestead exemptions claimed. Statements that FTB can't readily access but believes will help make its determination will be requested during FTB's audit. We have observed that it is very common for auditors to request information beyond what's needed to make their determination, which makes it crucial to never respond to any FTB residency inquiry without professional representation. We understand the information that FTB has and that it's entitled to, and managing this flow of information is where our expertise really comes into play. We've sat on both sides of the table. We understand their capabilities, their limitations, and the rules that they operate under. Don't sacrifice your privacy rights!
Navigating an FTB residency audit alone can be an expensive mistake. If you've received an audit notice or are planning a move out of California, let's talk about protecting your interests from the start.