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California Tax Law Questions & Answers
1 Answer | Asked in Business Formation and Tax Law for California on
Q: Is using a virtual mailbox address for your business considered tax evasion if it’s not in the state where you live?

Can I use a virtual address when filing an LLC to establish my business legally?

James L. Arrasmith
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answered on Sep 28, 2023

Using a virtual mailbox address for your business is not automatically considered tax evasion under California law. Many businesses use virtual addresses for legitimate reasons such as privacy and convenience. However, it's essential to ensure that your LLC complies with all relevant tax laws,... View More

1 Answer | Asked in Tax Law, Banking, Divorce and Family Law for California on
Q: My bank account got FTB legal order on hold fund due to my husband not paying the tax, but we are separated

My husband and I are separated. After he stopped paying monthly support, I filed legally separated, and the court has ordered him to pay support, but he closed all the bank accounts (including joint accounts) and hiding outside of the US after selling his inheritance house. After filed separation,... View More

James L. Arrasmith
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answered on Sep 22, 2023

You may be able to file for innocent joint filer relief to address the tax liability issue caused by your husband's actions. You should consult with an attorney experienced in tax matters to guide you through the process and discuss potential options to release the hold on your bank account.... View More

2 Answers | Asked in Employment Discrimination, Employment Law and Tax Law for California on
Q: Settling on a wrongful termination case. My previous employer is insisting on taxing the full amount.

I want to change my w4 to exempt. I am currently not working and haven’t for several months. Can I claim exempt on the w4 before he issues the check?

James L. Arrasmith
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answered on Aug 29, 2023

Under both California and federal tax law, certain portions of a wrongful termination settlement can be subject to taxes. While you may technically change your W-4 to "exempt," doing so doesn't necessarily shield you from the legal requirement to pay taxes on income, which may... View More

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2 Answers | Asked in Employment Discrimination, Employment Law and Tax Law for California on
Q: Settling on a wrongful termination case. My previous employer is insisting on taxing the full amount.

I want to change my w4 to exempt. I am currently not working and haven’t for several months. Can I claim exempt on the w4 before he issues the check?

Neil Pedersen
Neil Pedersen
answered on Aug 28, 2023

It depends on what your former employer is willing to do. To protect itself, the employer must use the status it used when you worked there so that it does not get hit with penalties and other assessments.

This is a risk management issue for the employer.

Good luck to you.

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1 Answer | Asked in Landlord - Tenant and Tax Law for California on
Q: Tax Implications of a Moving Fee Under the Ellis Act for Elderly or Disabled Tenant Protection

Tax Implications of a Moving Fee Under the Ellis Act for Elderly or Disabled Tenant Protection

I recently received a payment of $10,000 from my former landlord as a moving fee in accordance with California's Ellis Act, specifically related to provisions for elder or disabled... View More

James L. Arrasmith
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answered on Aug 27, 2023

Compensatory payments, like the one you received under the Ellis Act provisions, are generally considered income and may be taxable. Your landlord's intent to claim a deduction for the payment does not affect its taxability to you. To ensure proper reporting and understand potential exclusions... View More

1 Answer | Asked in Tax Law and Immigration Law for California on
Q: Does Pandemic Unemployment Income Qualify to be listed as part of adjusted gross income on I-864 Part 6. Line 24.a.b.c.?

In addition to the above question: Most Recent Tax Year refers to 2022, 2nd most recent 2021, 3rd most recent 2020, correct?

James L. Arrasmith
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answered on Aug 27, 2023

For the I-864, Affidavit of Support, unemployment income, including Pandemic Unemployment Assistance (PUA), is generally considered as part of your total income and would be part of your adjusted gross income (AGI) as it's reported on your federal tax return. Therefore, it can be listed on... View More

1 Answer | Asked in Tax Law for California on
Q: Should I file an offer & compromise or currently non-collectable? Should I hire a professional? How much should I offer?

I have a $40k tax lien from unpaid general excise tax from the state of Hawaii. I'd like to file an offer and compromise and be done with this debt. I'd also consider filing for currently non-collectable. Is it best to work with a professional or is this something I can do myself? My wife... View More

James L. Arrasmith
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answered on Aug 25, 2023

Given the complexities of tax matters, particularly involving offers in compromise or currently non-collectible status, seeking assistance from a tax professional, such as a tax attorney or CPA, is recommended. They can help assess your financial situation, guide you on the best course of action,... View More

1 Answer | Asked in Tax Law for California on
Q: Do I have to repay these funds?

The year I retired, I contributed less than my total salary to my 401k. My employer contributed a like amount plus $2,000, exceeding my total salary by $14,000. I rolled the funds into any IRA. I did not know of the limitation that total contributions could not exceed my salary.

What... View More

James L. Arrasmith
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answered on Aug 15, 2023

Under the tax code, contributions to a 401(k) plan are generally limited to a certain percentage of your salary, with specific limits in place to prevent exceeding certain thresholds. If you inadvertently contributed more than the allowed limit, you may be subject to penalties and taxes on the... View More

1 Answer | Asked in Tax Law, Real Estate Law and Business Law for California on
Q: When a non-profit organization dissolves, does the IRS-required asset-distribution clause apply to fixed assets, home?

If a home was listed in a non profits assets on 990 form but the majority was purchased in Mexico (foreign country) with "own" money and only part from non-profit assets "donor", assuming the asset was purchased over 25 years ago, if the non-profit dissolves, is the asset... View More

James L. Arrasmith
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answered on Aug 15, 2023

When a non-profit organization dissolves in California, the IRS-required asset distribution clause generally applies to all assets, including fixed assets such as a home. The allocation of proceeds upon sale would depend on the ownership structure of the property and the proportion of non-profit... View More

2 Answers | Asked in Real Estate Law, Tax Law and Banking for California on
Q: Can I get a reverse mortgage from a bank in Georgia on real property in State of California??
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answered on Aug 14, 2023

While reverse mortgages are generally available across states, they involve specific regulations and considerations that vary. It's essential to work with a qualified attorney to navigate the legal and financial aspects of obtaining a reverse mortgage on California real property from a bank in... View More

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2 Answers | Asked in Real Estate Law, Tax Law and Banking for California on
Q: Can I get a reverse mortgage from a bank in Georgia on real property in State of California??
T. Augustus Claus
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answered on Aug 10, 2023

Yes, it's generally possible to get a reverse mortgage from a bank in Georgia for real property located in California. Reverse mortgages are federally insured loans, and they are not limited to being offered by banks in the state where the property is located. However, the specific terms,... View More

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3 Answers | Asked in Employment Law and Tax Law for California on
Q: Can an employer demand overpaid wages in the gross amount? It was not due to my error.
Neil Pedersen
Neil Pedersen
answered on Aug 8, 2023

Whether the over-payment was your fault, the employer's fault or no one's fault, you are not legally allowed to keep money paid to you by mistake. Unless you work out alternative arrangements, the employer can demand the immediate return of all the money paid to you (gross amount) and... View More

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1 Answer | Asked in Tax Law for California on
Q: Mine and my brother's house was sold at a tax lien auction....

My brother and I inherited this home from our grandparents in which it was sold at a tax lien auction. My brother didn't claim excess proceeds , there is an agent claiming for me, will I get my brothers and mine ? How much percentage is an agent allowed to charge for their services in... View More

James L. Arrasmith
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answered on Jul 25, 2023

In California, an agent representing you in claiming excess proceeds from a tax lien auction is typically entitled to a reasonable fee, but there are no specific percentage limits set by law. However, charging 29% may be considered excessive. You have the right to negotiate the agent's fee or... View More

2 Answers | Asked in Tax Law and Gov & Administrative Law for California on
Q: Can you get tsa precheck if you’ve ever received a customs seizure letter
T. Augustus Claus
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answered on Jul 17, 2023

Receiving a customs seizure letter may not necessarily disqualify you from obtaining TSA PreCheck. TSA PreCheck eligibility is primarily based on a person's criminal background and security risks. Customs seizure letters generally relate to violations of customs laws and regulations, which may... View More

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2 Answers | Asked in Tax Law and Gov & Administrative Law for California on
Q: Can you get tsa precheck if you’ve ever received a customs seizure letter
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answered on Jul 21, 2023

TSA PreCheck is a program run by the Transportation Security Administration (TSA) and is generally available to U.S. citizens, U.S. nationals, and lawful permanent residents who have not been convicted of certain disqualifying crimes. A customs seizure letter alone should not automatically... View More

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2 Answers | Asked in Tax Law for California on
Q: Just discovered tax lien on previous aircraft owner in 2007 from S.B. Equalization & lien is on aircraft my options are

I ran a title search on this aircraft before purchase and there were no liens of record. It is now 2023 . The aircraft had damage during landing. The Lien is on the aircraft . Should I just hand over owner ship of the aircraft to the Board of Equalization or does this lien still exist after all... View More

Samuel  Landis
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answered on Jul 17, 2023

A tax lien which you describe can last up to 20 years. If you sell the aircraft, then the proceeds from the sale would be applied to the tax lien. Any funds beyond the amount owed on the tax lien may be distributed to you barring that there are no other lien holders.

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1 Answer | Asked in Tax Law for California on
Q: How long can a non-resident of OH telework for an out of state business while visiting Ohio without having to pay taxes?

I live in California and the company I work for is in California. I addition to my question about liability for personal income taxes in Ohio, I need to know at what point my company would be required to pay into Ohio workers comp and pay any other Ohio business taxes. Thanks!

James L. Arrasmith
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answered on Jul 11, 2023

According to the Ohio Department of Taxation, a non-resident of Ohio who teleworks for an out-of-state business while visiting Ohio is not liable for personal income taxes in Ohio for the first 30 days of teleworking. After 30 days, the non-resident will be liable for personal income taxes in Ohio... View More

3 Answers | Asked in Tax Law for California on
Q: Got a CP2000 Notice from IRS stating that I have not reported two 1099-NEC that are not mine.

The IRS provided some information on the 1099 including the amount and the issuer of the 1099s. One entity issued two different 1099s. I did some digging and discovered that both belong to my family members. They confirmed that they reported income for the two 1099s received from that issuer and... View More

Carmela Graciela Walrond
Carmela Graciela Walrond
answered on Jul 14, 2023

I recommend to file a Form 911 and have a taxpayer advocate assigned to the case. Submit a Form 14039 Identity Theft Affidavit with the Form 911 application. It Is best to have an assigned caseworker resolve to remove the

Form 1099-NEC from your account. There is too much red tape when...
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3 Answers | Asked in Tax Law for California on
Q: Got a CP2000 Notice from IRS stating that I have not reported two 1099-NEC that are not mine.

The IRS provided some information on the 1099 including the amount and the issuer of the 1099s. One entity issued two different 1099s. I did some digging and discovered that both belong to my family members. They confirmed that they reported income for the two 1099s received from that issuer and... View More

James L. Arrasmith
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answered on Jul 10, 2023

If you received a CP2000 Notice from the IRS stating that you failed to report two 1099-NEC forms that don't belong to you, it's important to respond promptly. After investigating, you discovered that the 1099s actually belong to your family members. To resolve the issue, you plan to... View More

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3 Answers | Asked in Tax Law for California on
Q: Got a CP2000 Notice from IRS stating that I have not reported two 1099-NEC that are not mine.

The IRS provided some information on the 1099 including the amount and the issuer of the 1099s. One entity issued two different 1099s. I did some digging and discovered that both belong to my family members. They confirmed that they reported income for the two 1099s received from that issuer and... View More

Maurice Mandel II
Maurice Mandel II
answered on Jul 9, 2023

IRS makes mistakes just like any government agency. However, there are also a lot of scammers who pretend to be the IRS in order to commit IDENTITY THEFT, and you may be providing them with information about your relatives that could allow the scammer to steal their identity. I would contact the... View More

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