Mailing of Corporation Notices for the U.S. Treasury Offset Program (FTOP)
Purpose of bulletin
To inform staff on March 12, 2012, we began sending notices to corporations for the Federal Treasury Offset Program (FTOP). The program offsets federal income tax refunds, overpayments on delinquent personal, corporations, and limited liability companies filing as corporations.
The Department of Treasury, Financial Management Service (FMS), is the federal government central debt collection agency. They administer the FTOP debt collection program and collect federal tax, federal non-tax, child support, and state income taxes.
Legal authorities allowing states to participate include Title 26, United States Code 6402(e); and Title 31, Code of Federal Regulations 285.8. The regulation governing the offset of tax refund payments to collect state income tax debts may be found on the following website:
Priority of debt
When more than one debt is submitted for the same taxpayer and according to statute, FMS applies money in the following order:
- Federal tax
- Child support
- Federal non-tax
- State income tax
We have signed an agreement with FMS stating all debts we refer are:
- Delinquent, valid, and legally enforceable
- Not in bankruptcy or foreclosure
- Not delinquent over 10 years old
Intent to offset notice
FTOP staff will select cases and generate Form FTB 1102BC, Intent to Offset Federal Payments, by certified mail with a return receipt.
In order for taxpayers to avoid the offset, they must:
- Pay the balance in full.
- Provide proof that the debt is not past due or legally enforceable.
If the taxpayer does not respond within 60 days, we refer the debt to FMS for offset of federal payments.
Post offset notice
Once an offset occurs, FMS sends a post offset notice with the date, amount, and contact information to the FTOP offset desk.
A $22.00 fee is assessed for each offset and is adjusted yearly.
Taxpayers can go to ftb.ca.gov, and search for “treasury offset.”
Refer taxpayers who received an Intent to Offset or Post Offset Notice to:
Offset Desk at:
INTERAGENCY INTERCEPT COLLECTIONS MS-A460
FRANCHISE TAX BOARD
PO BOX 2966
RANCHO CORDOVA CA 95741-2966
Direct media contacts to:
- Public Affairs at 916.845.4800