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State of California Franchise Tax Board

FTB Offers Help if You Cannot Pay in Full

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Public Affairs Office
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For Immediate Release

03.27.2014

FTB Offers Help if You Cannot Pay in Full

Sacramento – With the tax season in full swing, the Franchise Tax Board (FTB) advises taxpayers who face financial hardship to contact FTB for assistance. FTB has many options to help taxpayers who cannot pay their tax liability in full.

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. Next, they need to watch their mail for their Statement of Tax Due sent to taxpayers who failed to fully pay their tax liability. Once taxpayers receive this statement, they can begin to look at other assistance from FTB.

Payment Plans

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

Offer in Compromise

An Offer in Compromise (OIC) 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 liability 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. Generally, FTB will not accept an offer if FTB believes the liability can be paid in full 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 experiencing a financial hardship is selling or refinancing a home for less than the loan balance, taxpayers, their representatives, or their lenders, may request that we “subordinate” or lower the lien priority to allow a financial institution to refinance or modify the loan. When a home is selling for less than the loan balance, we can remove the tax lien from the property to allow the homeowner to complete the sale. 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.”

FTB administers two of California's major tax programs: Personal Income Tax and the Corporation Tax. FTB also administers other non tax programs and delinquent debt collection functions, including delinquent vehicle registration debt collections on behalf of the Department of Motor Vehicles, and court–ordered debt. Annually, FTB’s tax programs collect more than 65 percent of the state’s general fund. For more information on other taxes and fees in California, visit taxes.ca.gov.

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