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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.

Background

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:

http://www.fms.treas.gov/debt

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

Certified debt

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.

Additional information

A $22.00 fee is assessed for each offset and is adjusted yearly.

Taxpayer inquiries

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:

  • 916.845.2867

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