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Tax Help Available For Those Facing Financial Hardship

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Public Affairs Office
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For Immediate Release

04.03.2013

Sacramento – With the April 15 tax deadline looming, the Franchise Tax Board (FTB) today advised taxpayers who face financial hardship to contact FTB for assistance. FTB has many options to help taxpayers handle their tax bills. 

FTB assists those with financial hardships by establishing payment plans and sometimes delaying collection activities. The number of taxpayers seeking relief through payment plans has remained the same as last year but has increased by 126 percent over the last five years. 

File Your Tax Return
First and foremost, taxpayers should file their state tax return on time and pay what they can. This can reduce the penalties and interest down the road. FTB will send a Statement of Tax Due when a tax return is submitted without full payment. Once taxpayers receive that statement, they can begin to look at other assistance from FTB. 

Payment Plans
FTB generally approves monthly payment plan requests if the balance owed is less than $25,000 and can be paid within 60 months. Liens are not typically filed on taxpayers paying their state tax through payment plans. Taxpayers can request payment plans online at ftb.ca.gov by selecting “installment arrangement” under Online Services or by calling our automated phone line at 800.689.4776. Service is available in both English and Spanish. 

Offer in Compromise
The Offer in Compromise (OIC) Program is for taxpayers who do not have, and will not have in the foreseeable future, the income, assets, or means to pay their tax liability. An OIC is an agreement between a taxpayer and FTB that settles the taxpayer’s tax liabilities for less than the full amount owed. FTB looks at the taxpayer's income and assets to make a determination regarding the taxpayer’s ability to pay. Absent special circumstances, FTB will not accept an offer if FTB believes the liability can be paid in full as a lump sum or through an installment agreement. For more information go to ftb.ca.gov and search for “Offer in Compromise.”

Help with State Tax Liens
If you have a state tax lien and are trying to sell or refinance your home, FTB can help. State tax liens must typically be paid before real estate can be sold or refinanced. If a taxpayer suffering a financial hardship is selling or refinancing a home for less than the loan balance, FTB can remove the tax lien to allow the homeowner to complete the sale. This can generally occur within two weeks of the taxpayer submitting the required documents. However, the tax lien remains in effect on any other property the taxpayer currently holds or later acquires. For more information go to ftb.ca.gov and search for “Lien.”

 

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