Malcolm Terrence Fairbanks , JD, LLM Taxation

Malcolm defends individuals in residency audits and plans mobility transitions for clients whose employers span California, New York, and Washington. The Franchise Tax Board is his most frequent adversary. He maintains a set of domicile indicators, driver’s license, voter registration, vehicle registration, treating-physician location, pet veterinarian, storage unit lease, that he drills clients on before a planned move, because the FTB reviews all of them during an audit.

The pattern he unwinds every spring is the California trailing tax on post-move RSU vests. A senior engineer lived in California for the first two years of a four-year grant, moved to Austin in year three, and continued to vest 12,500 shares per year. California sources the vesting income based on workdays-in-California during the vesting period, meaning roughly 50% of every post-move vest remains California taxable even though the client is now a Texas resident. At a $240 share price that is roughly $3M of lifetime California-source income the client did not expect. If the client paid Texas tax on the same income there would be a credit, but Texas has no income tax, so the full California liability flows without offset. He files the part-year and nonresident returns, and in audit situations he negotiates source-period apportionment that reflects actual work-location records.

He reviews content on residency, sourcing, and state-level capital gains.