When tax trouble arises, one of the most confusing questions for individuals and business owners is: “What state should I hire a tax attorney in?” While the Internal Revenue Code is uniform across the country and federal tax matters fall under the jurisdiction of the IRS, each U.S. state maintains its own set of tax laws, regulations, and enforcement mechanisms. The distinction between federal and state tax enforcement is critical—and hiring the wrong legal representation can turn a manageable issue into a costly, protracted dispute and, at worse, expose you to elevated penalties and potential criminal tax liability.
For federal tax issues—such as disputes with the IRS over income tax, payroll tax, offshore disclosures, or criminal tax investigations—any U.S.-licensed tax attorney in good standing can represent you regardless of where you live. But what you want is the BEST Tax Attorney that you can afford. Look no further. Our promise to you is that even though all our staff is located in California. If we have to travel to your location to fix a tax problem, you will not be charged travel time or travel expenses for us to do so. We believe we are among the best tax practitioners in America and charge very reasonable prices given our expertise, dual credentials as both Tax Attorneys and CPA, A+ BBB rating & perfect 10 AVVO rating.
However, when it comes to state-specific issues like income tax disputes, sales and use tax audits, franchise tax liabilities, or property tax reassessments, it’s essential to hire a tax attorney licensed in the relevant state. Each state’s tax code differs significantly, and only an attorney licensed in that state is authorized to represent you in administrative hearings or litigation before that state’s tax agencies and courts.
At the Tax Law Offices of David W. Klasing, we believe that every client deserves elite legal and tax counsel—no matter in which state they are located. That’s why, in addition to our fully staffed main office in Irvine, California, we maintain multiple unstaffed (conference room only) satellite offices across California state and nationwide. From Los Angeles, San Francisco, and San Diego to Las Vegas, Phoenix, Austin, New York, Washington D.C., and Miami, our reach is truly national, enabling us to provide federal and California state tax representation wherever it’s needed most.
Our dual-licensed Tax Attorneys and CPAs offer coordinated legal, tax & accounting services under one roof—all for one price. An instrument-rated private pilot, David will fly his efficient, fast, and safe Cirrus SR22 to meet clients in various states without charging travel expenses or travel time, where preceded by a one-hour initial consultation, be it by phone call or encrypted and secure video chat via firm supplied go to meeting software. Moreover, we have introduced a convenient scheduling option, where clients can secure David W. Klasing, Esq M.S.-Tax CPA’s undivided attention for a 4-hour consultation at any of his California or south west satellite offices.
Our office technology allows clients to meet virtually via GoToMeeting. With end-to-end encryption, strong passwords, and top-rated reliability, no one is messing with your meeting. To schedule a reduced rate initial consultation via GoToMeeting, follow this link. Call our office and request a GoToMeeting if you are an existing client. Call us at 800-681-1295 or complete our online contact form today.
When to Hire a Tax Attorney in Your Own State
Hiring a Tax Attorney licensed in your home state is typically the right choice when the tax issue you’re facing involves your state’s taxing authorities. For example, if you are a California resident, purported nonresident, or own an out of state business that is being audited by the Franchise Tax Board (FTB) or the California Department of Tax and Fee Administration (CDTFA), or the California Employment Development Department (EDD), you need a California-licensed tax attorney to represent you. The same applies if you’re facing a California wage garnishment, bank levy, or business license suspension arising from unpaid California taxes. Attorneys licensed out of state are not only legally prohibited from appearing in hearings and from negotiating with California auditors, they also will not understand the procedural nuances, culture, and enforcement tendencies of California’s tax agencies.
State residency issues are another common reason to retain in-state representation. State tax authorities commonly pursue aggressive residency audits especially in high-tax states like California if they suspect you’ve moved primarily to avoid state taxes or in name only. In these cases, a local tax attorney is indispensable for defending your domicile, proving intent to change residence, and handling the deep documentation review typical in residency challenges.
Property tax disputes, state employment tax audits, and state-initiated individual or entity-level income tax issues for pass-through businesses, or C Corporations, also fall squarely in the jurisdiction of the appropriate state tax agencies. If you own property or operate a business in a given state, you are subject to that state’s tax laws and should consult a tax attorney licensed there. Significant economic contacts with a state can result in that state having nexus to tax you or your business or require sales tax to be collected and remitted even in the absence of physical presence under the U.S. Supreme Court’s holing in Wayfair. While Wayfair was purely a sales tax case, most states have been extending its holding to justify asserting Nexus for income tax purposes especially after a business starts filing sales tax returns in their state.
When to Hire a Tax Attorney in a Different State
There are scenarios where your tax obligations extend beyond your home state—and in those cases, hiring an out-of-state tax attorney may be necessary. This is especially true for businesses with multi-state operations, online sellers, or remote service providers who may have triggered tax obligations under another state’s economic nexus laws.
Since the U.S. Supreme Court’s 2018 decision in South Dakota v. Wayfair, states have had greater authority to impose sales tax collection obligations on out-of-state businesses based solely on economic nexus—meaning sufficient sales or transaction volume in the state. For example, if you’re a Texas-based seller who has made $500,000 or more in sales to customers in California, you may be required to collect and remit California sales tax and could be audited by the CDTFA. In such a case, hiring a California-licensed Tax Attorney becomes essential.
Similarly, if you receive a subpoena, audit notice, or tax collection letter from a state where you do not reside—but where you have customers, employees, or sales—you may need legal representation from someone licensed in that state. Ignoring out-of-state correspondence or trying to handle it with a local general practitioner often leads to procedural missteps and escalated liability.
When clients come to the tax law offices of David W. Klasing unsure where their tax problem “belongs,” our team performs a comprehensive jurisdictional analysis. We examine your residency, business structure, sales footprint, transaction history, and correspondence with tax authorities to determine whether federal, state, or multi-state representation is required.
The Danger of Ignoring Interagency Coordination Between IRS and California State Tax Authorities
One of the most overlooked—but critically important—factors in choosing where to hire a tax attorney is the coordination between federal and state taxing authorities. Federal and California tax agencies routinely share taxpayer information, meaning that changes or issues in one jurisdiction rarely stay confined.
If the IRS audits your return and makes changes, California law requires you to report those changes to the Franchise Tax Board (FTB) within six months. If you fail to do so, the state’s statute of limitations remains open indefinitely, giving the FTB years to assess additional tax, penalties, and interest. And even if you do nothing, the IRS’s audit findings will automatically be forwarded to California state, prompting the FTB to recalculate your liability and issue a state tax bill.
This flow of information also works in reverse. If the CDTFA uncovers underreported sales tax—say $100,000 in unreported cash sales in a single quarter—it may refer the matter to the FTB, which may then notify the IRS. Similarly, reclassifications by the EDD or income tax changes by the FTB often alert the IRS to audit or investigate. These referrals can result in cascading consequences: a seemingly minor state-level issue can become the trigger for a full-blown federal audit or even a criminal tax prosecution.
California’s aggressive information-sharing posture means that taxpayers often face multiple simultaneous audits from both federal and state authorities. For instance, an IRS audit of your business income can quickly lead to a follow-up FTB audit or CDTFA review. Each agency builds on the other’s findings, creating compounding tax assessments and escalating exposure.
The lesson is simple yet powerful: never assume your tax issues exist in isolation. Hire a tax attorney who understands the interplay between federal and California state taxing authorities and can address the full scope of your exposure. Coordinating amendments, audit responses, and strategic defenses across jurisdictions is crucial to prevent duplicate assessments and prevent civil issues from escalating into exponentially worse criminal tax investigations.
Contact the Tax Law Offices of David W. Klasing Today
If you’re facing a complex federal or California state tax audit—whether from the IRS, FTB, CDTFA, or EDD—and you’re concerned about red flags like underreported income, missing records, or unfiled returns escalating into a criminal tax investigation, the Tax Law Offices of David W. Klasing is uniquely positioned to defend you. Our dual-licensed Tax Attorneys and CPAs are nationally recognized for handling high-risk audits, including eggshell and reverse-eggshell scenarios, where even a single misstep could trigger prosecution. We understand how California state and federal tax agencies share data in real-time, and we know how to respond strategically before matters escalate into IRS-CI referrals and criminal tax prosecutions. Don’t face these challenges alone—contact us and get the protection, discretion, and multi-jurisdictional expertise your case demands.
To set up a reduced-rate initial consultation, call the tax law offices of David W. Klasing at (888) 310-3543 or contact us online.
