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Franchise Tax Board Sends Warning Letters to State’s Top Tax Debtors

Released: September 4, 2007

FTB’s Website to List the State’s Top 250 Income Tax Debtors in October

The Franchise Tax Board (FTB) today said it mailed letters to its top 250 delinquent taxpayers warning them that their tax debt information is about to be made public on its Website if they do not pay.

“The loss of $6.5 billion in unpaid taxes hurts all Californians, who depend on schools, health facilities transportation projects and public safety services that are funded by these tax revenues,” said State Controller and FTB Chair John Chiang. “Under this new law, the FTB is authorized to publicize the names of those taxpayers who refuse to pay their fair share in the hopes they will quickly come forward and settle their debt."

The top 250 delinquent taxpayers owe more than $263 million in delinquent personal income and business taxes. The preliminary list shows individual debts ranging from $185,000 to nearly $27 million. The notification letters, titled Notice of Public Disclosure, provide taxpayers 30 days to pay their debts or obtain FTB approval to make installment payments. Those who do not pay will have the following information published on the FTB’s Website at www.ftb.ca.gov: Name, city, amount due, type of tax owed, date the earliest state tax lien was filed, and, at the request of the taxpayers, any subsequent payments made that addresses the delinquency.

Assembly Bill 1418 (Horton) directs the FTB to publicly list the 250 largest state income tax debtors who owe more than $100,000 in tax. The law excludes taxpayers whose debts are being paid in an installment payment arrangement or are being appealed, litigated, or involved in a bankruptcy proceeding.

The FTB expects to publish the list in mid-October. Taxpayers who do not respond to the letter, but later resolve their liabilities will be removed from the list as quickly as possible. FTB will refresh its list annually.

Individual taxpayers who receive the Notice of Public Disclosure warning letter may contact FTB at (866) 418-3702 and business taxpayers can call (866) 914-5594.

California is facing a yearly $6.5 billion tax gap. The tax gap is defined as the difference between the tax that is owed and the tax that is paid.

The Board of Equalization has a similar list of the state’s top sales and use tax delinquencies.