Financial Institution Record Match (FIRM)

What is FIRM?

The Financial Institution Record Match (FIRM) Program identifies delinquent debtor accounts through a record match process. FIRM requires all financial institutions doing business in California to enter into an agreement with the Franchise Tax Board (FTB) FIRM Program Administrator.

Since April 2012, the record match process is scheduled on a quarterly basis.

Law and Legislation

Senate Bill 86, Senate Bill 1015, and Assembly Bill 1411
Revenue and Taxation Codes:   19266 and 19560.5

Important Information

Draft Regulations

http://www.ftb.ca.gov/law/intParty/draft_reg_section_19266_092711.pdf




Introduction

Legislation SB 86 (Stats 2011, ch. 14), chaptered March 24, 2011, authorizes the Franchise Tax Board (FTB) to operate and administer a Financial Institution Records Match (FIRM) that utilizes automated data exchanges to the maximum extent feasible to identify accounts of delinquent tax debtors (as defined under Revenue and Taxation Code (R&TC) Section 19266(h)(3)) held at financial institutions (as defined under R&TC Section 19266 (h)(2)) doing business in California.  FIRM is an enforcement tool used to collect delinquent taxes and non-tax debts of individuals and business entities.  

The FIRM data exchange is generally intended to be similar to the Financial Institution Data Match (FIDM) program. FIDM is operated for purposes of child support collection (utilizing a Method 1 or Method 2 secured data exchange process), except that the statute uses the term "delinquent tax debtors" as defined by R&TC Section 19266.

Back to top

Background

Under R&TC Section 19266, FTB is authorized to implement a quarterly data match process to match specified debtor data against accountholder information of financial institutions doing business in California. FTB has entered into a contract with Informatix, Inc. (FIRM Program Administer) to manage the day-to-day operations of the FIRM program, administer the quarterly data exchange, provide customer service, and education and outreach services to financial institutions regarding the FIRM program.

General Provisions

FTB’s Authority:

  • R&TC Section 19266.
  • R&TC Section 19560.5.
  • FTB may institute civil proceedings to enforce R&TC Section 19266(f).

Definitions Under R&TC Section 19266(h)(1)

Account means a:

  • Demand deposit account
  • Share or share draft account
  • Checking or negotiable withdrawal order account
  • Savings account
  • Time deposit account
  • Money market mutual fund account regardless of whether the account bears interest.

Financial institution means:

  • A depository institution, as defined in Section 1813(c) of Title 12 of the United States Code.
  • An institution-affiliated party, as defined in Section 1813(u) of Title 12 of the United States Code.
  • A federal credit union or state credit union, as defined in Section 1752 of Title 12 of the United States Code, including an institution-affiliated party of a credit union, as defined in Section 1786(r) of Title 12 of the United States Code.
  • A benefit association, insurance company, safe deposit company, money-market fund, or similar entity authorized to do business in this state. (R&TC Section 19266 (h)(2))

Delinquent tax debtor means:

  • Any person liable for any income or franchise tax or other debt referred to the Franchise Tax Board for collection as imposed under Part 5 (commencing with R&TC Section 10701), Part 10 (commencing with R&TC Section 17001), Part 10.2 (commencing with R&TC Section 18401), or Part 11 (commencing with R&TC Section 23001), including tax, penalties, interest, and fees, where the tax or debt, including the amount, if any, referred to the Franchise Tax Board for collection remains unpaid after 30 days from demand for payment by the Franchise Tax Board, and the person is not making current timely installment payments on the liability under an agreement pursuant to R&TC Section 19006. (R&TC Section 19266 (h) (e))

Back to top

Disclosure

Unless otherwise required by law, a financial institution is prohibited from disclosing to a depositor or accountholder the name, address, social security number, or other identifying information of that delinquent tax debtor that has been received or furnished to FTB. (R&TC Section 19266(d))

The FIRM program will not be subject to any limitation set forth in the California Government Code Section 7460 et seq (California Right to Financial Privacy Act). However, any use of the information provided pursuant to R&TC Section 19266 for any purpose other than the collection of franchise or income tax or other nontax debts referred to FTB for collections shall be a violation of R&TC Section19542. (R&TC Section 19560.5)

Back to top

Protection for Financial Institutions

R&TC Section 19266(e) states a financial institution shall incur no obligation or liability to any person arising from any of the following:

  • Furnishing information to FTB as required by this section.
  • Failing to disclose to a depositor or account holder that the name, address,
    social security number or other taxpayer identification number, or other identifying information of that delinquent tax debtor was included in the data exchange with us required by this section.
  • Any other action taken in good faith to comply with the requirements of this section.

Back to top

Noncompliance Penalty

Under R&TC Section 19266, subdivision (f), FTB may institute civil proceedings to enforce the provisions of R&TC Section 19266.

Any financial institution that willfully fails to comply with the rules and regulations openly declared by FTB for the administration of delinquent tax collections, unless it is shown to our satisfaction that the failure is due to reasonable cause, shall be assessed a penalty upon notice and demand, and collected in the same manner as tax. The penalty imposed under this section shall be in an amount equal to fifty dollars ($50) for each record not provided, but the total imposed on that financial institution for all such failures during any calendar year shall not exceed one hundred thousand dollars ($100,000). (R&TC Section 19266(g))

Back to top

Employment of Third Party Vendor (Transmitter)

A financial institution may use a transmitter for the automated data exchanges.  If a transmitter is used, the financial institution shall provide the name and contact information of its transmitter to the FIRM Program Administrator on the FTB 2060 PC, Election. When a financial institution designates a transmitter on the election form and files it with the FIRM Program Administrator, the financial institution grants the FIRM Program Administrator permission to exchange data and records as well as communicate with the transmitter on behalf of the financial institution.

The use of a transmitter by a financial institution does not relieve that financial institution of liability for any penalty for failure to provide one or more records. (R&TC Section 19266 (g)).

Back to top

Temporary Exemption

FTB is authorized to exempt a financial institution from the requirements of R&TC Section 19266(a)(2)(C), if FTB determines that the financial institution's participation would not generate sufficient revenue to be cost effective.

A temporary exemption applies to financial institutions holding less than 250 open accounts, unless it would be cost effective for FTB to require the financial institution to comply with the requirements of the FIRM data match process.  A financial institution holding less than 250 open accounts may submit a FTB 2058 PC, Temporary Exemption/Suspension Request, to the FIRM Program Administrator under forms and instructions provided by FTB.

FTB reserves the right to require a financial institution that has been granted temporary exemption to complete and file an FTB 2060 PC, Election, with the Firm Program Administrator and participate in the FIRM data match process.  The FIRM Program Administrator shall notify the financial institution in writing of the date that the FTB 2060 PC, Election, is to be submitted and the date that the financial institution shall begin participating in the FIRM data match process.

If a financial institution believes facts exist for FTB staff to grant a temporary exemption, the financial institution may submit and file a FTB 2058 PC, Temporary Exemption/Suspension Request, with the FIRM Program Administrator.  The financial institution shall provide sufficient detail for FTB staff to evaluate its request.

Example:  Financial institution B merged with financial institution A.   The institutions are undergoing a major data processing change at the end of a quarter.  Financial institution A (the surviving financial institution) can apply to FTB for a FTB 2058 PC, Temporary Exemption/Suspension Request, stating that the additional cost to participate in the data match for that quarter would be significant and not cost effective.  Based on the facts, FTB may grant a temporary exemption for one quarter.

FTB shall consider a financial institution's FTB 2058 PC, Temporary Exemption/Suspension Request. Unless otherwise stated, the temporary exemption remains in effect for twelve months from the date of approval or until the FIRM Program Administrator receives written notice from the financial institution that a change has occurred in the underlying facts that warranted the temporary exemption.

Sixty days (60) prior to expiration of the temporary exemption, a financial institution that seeks to renew its temporary exemption status shall complete and submit a new FTB 2058 PC, Temporary Exemption/Suspension Request, to the FIRM Program Administrator.  Within sixty (60) calendar days of determining that the facts upon which the temporary exemption no longer exists, the financial institution shall notify the FIRM Program Administrator of the change and shall file a FTB 2060 PC, Election, with the FIRM Program Administrator to begin participation in the exchange process. 

Submit notices or requests for temporary exemptions to the FIRM Program Administrator on the FTB 2058 PC, Temporary Exemption/Suspension Request.

Back to top

Temporary Suspension

FTB is authorized to temporarily suspend a financial institution from the requirements of R&TC Section 19266(a)(2)(D), if the financial institution provides FTB with a written notice from its supervisory banking authority that it is determined to be undercapitalized, significantly undercapitalized, or critically undercapitalized as defined by FDIC Regulation 325.103(b)(3), (4), and (5), or NCUA Regulation 702.102.

The notice from the supervisory banking authority provided pursuant to this subsection shall be subject to the nondisclosure protections of R&TC Section 19542.

A financial institution that requests a temporary suspension shall submit a FTB 2058 PC, Temporary Exemption/Suspension Request, to the FIRM Program Administrator under forms and instructions provided by FTB. FTB shall consider the request and respond to the financial institution in writing within sixty (60) calendar days of the request. If granted, the temporary suspension remains in effect for twelve months from the date of approval. Sixty (60) calendar days prior to the expiration of the grant of the temporary suspension, a financial institution that seeks to renew its temporary suspension status shall complete and submit a new FTB 2058 PC, Temporary Exemption/Suspension Request, to the FIRM Program Administrator.

Within sixty (60) calendar days of receipt of a written notice from its supervisory banking authority removing the determination, the financial institution shall notify the FIRM Program Administrator of its change in financial condition and shall file a FTB 2060 PC, Election, with the FIRM Program Administrator to begin participation in the exchange process.

Submit notices for temporary suspension, along with accompanying documentation, to the Program Administrator on the FTB 2058 PC, Temporary Exemption/Suspension Request.

Back to top

Filing the FIRM Election

Financial institutions doing business in the state of California, within the meaning of R&TC Section 23101, shall complete and file with the FIRM Program Administrator the FTB 2060 PC, Election, which establishes FIRM program participation, the chosen method of data matching, and the name of the transmitter (if one is used).

Once the financial institution submits and files a completed FTB 2060 PC, Election, with the FIRM Program Administrator, the election on the form remains binding until the financial institution submits a new form. The financial institution shall submit and file any changes to the financial institution’s name with the FIRM Program Administrator on a new FTB 2060 PC, Election, within thirty (30) calendar days of approval of a name change from its primary regulator.  Any new contact information shall be submitted and filed with the FIRM Program Administrator on a new form as soon as the change is established at the financial institution.

The financial institution shall submit and file any changes to the financial institution’s transmitter or election method with the FIRM Program Administrator on a new FTB 2060 PC, Election, at least sixty (60) calendar days in advance of the next calendar quarter.

Back to top

Acknowledgement of Election Form: Notification of FIRM Participation

Following the Program Administrator's receipt and review of the FTB 2060 PC, Election, for completeness, the FIRM Program Administrator shall notify the financial institution in writing that it has received the financial institution's completed FTB 2060 PC, Election. The FIRM Program Administrator shall notify the financial institution in writing if the information is incomplete.  The financial institution shall submit a new form within thirty (30) calendar days of receiving notification of an incomplete FTB 2060 PC, Election.

The FIRM Program Administrator shall notify the financial institution in writing as to the calendar quarter the financial institution shall begin its quarterly participation under the Participation Schedule.  Unless otherwise directed in writing by the FIRM Program Administrator, all subsequent data matches shall continue as described in the Participation Schedule.

Back to top

Data Match Procedures

The financial institution shall complete and submit to the FIRM Program Administrator a FTB 2060 PC, Election, which establishes the financial institution's chosen method of data matching with FTB using either Method 1 or Method 2.

Method 1

Pursuant to the FIRM Participation Schedule, the financial institution or its transmitter shall submit a data file through a Secure Web Internet File Transfer (SWIFT) application to the FIRM Program Administrator that contains records of all open accounts held by the financial institution ("All Account File"). Submitted files are matched against FTB delinquent tax debtor file ("Debtor File") by the FIRM Program Administrator.

A financial institution shall select Method 1 only if it does not have the technical ability to process the data exchange or the ability to employ a third party data processor to process the data exchange. A financial institution may use a transmitter to submit a data file through a SWIFT application to the FIRM Program Administrator. For all subsequent quarters, the financial institution or its transmitter shall submit a file that contains either records of accounts opened, closed, or changed during a particular quarter ("Update File"), or an “(All Accounts File).”

Method 1 - Reporting “No Updates”

If the Method 1 update selection process results in “No Updates” for a particular quarter, send an email to the FIRM email address below with “No Updates” in the subject line and include the following information in the body of the email. Do not submit a file if there are “No Updates:”

  • Method type
  • Quarter
  • Institution FEIN
  • Contact person
  • Contact person phone number
  • Contact person email address
  • Transmitter name

FIRM email address: CATAX@informatixinc.com

Method 2

Pursuant to the FIRM Participation Schedule, the financial institution or its transmitter shall download a delinquent tax debtor file (the "Franchise Tax Board Inquiry File") through a SWIFT application pursuant to forms and instructions provided by FTB.

The financial institution or its transmitter shall match FTB Inquiry File against all open accounts maintained by the financial institution regardless of the accountholder’s residence for the calendar quarter. The financial institution or its transmitter submits a file of matched records to the FIRM Program Administrator through a SWIFT application in accordance with forms and instructions provided by FTB.

If the financial institution determines its transmitter is unable to process the data exchange as required, the financial institution shall complete and submit a new FTB 2060 PC, Election, to the FIRM Program Administrator stating its change in transmitter or election method.

The financial institution and its transmitter shall protect the confidentiality of FTB "Inquiry File" and any data and records supplied to the financial institution by the FIRM Program Administrator.

Method 2 Reporting - "No Matches"

If the Method 2 match process results in “No Matches,” send an email to the FIRM email address below with “No Updates” in the subject line and include the following information in the body of the email. Do not submit a file if there are “No Updates:”

  • Method type
  • Quarter
  • Institution FEIN
  • Contact person
  • Contact person phone number
  • Contact person email address
  • Transmitter name

The residence of the account holder of a financial institution is irrelevant for the purpose of conducting the data match.

FIRM email address: CATAX@informatixinc.com

Back to top

Participation Schedule

The FIRM Participation schedule is shown below. The schedule includes the Inquiry File Availability Date for the Method 2 Inquiry File provided by the FIRM Program Administrator and the Due Date for financial institutions to submit the Method 1 and 2 Matched Files (Method 1 & 2 Matched Files due date).

Quarter Quarter Months Quarter Ending Date Inquiry File Availability Date (Method 2) Method 1 & 2 Matched Files Due
1st Qtr Jan, Feb, Mar Mar 31 Apr 15 May 30
2nd Qtr Apr, May, Jun Jun 30 July 15 Aug 30
3rd Qtr Jul, Aug, Sep Sep 30 Oct 15 Nov 30
4th Qtr Oct, Nov, Dec Dec 31 Jan 15 Feb 28

If the Due Date falls on a weekend or holiday, the due date shall be the next business weekday.

To assist in program administration, the Inquiry File Availability Dates (Method 2) and the Method 1 & 2 Match Files Due Dates may be modified at any time by FTB, but in no event shall such dates be earlier than the dates specified in the table above. The FIRM Program Administrator shall provide written notice to the financial institutions prior to any change in the schedule.

Back to top

Media Type

The FIRM Program Administrator will provide participants with the FTB Inquiry File through a SWIFT application. The FIRM Program Administrator does not accept data provided on tape cartridge, compact disk, or written reports.

Back to top

Submitting Files to FTB

To submit a file using the Method 1 All Accounts File, the Method 1 Update File, or the Method 2 Match File, follow these specifications unless specifically stated otherwise:

  • All records must be a fixed length of 420 bytes (tape positions).
  • All records, except the header and trailer labels, shall be in fixed block format, not variable. The number of records within a block must be constant in every block, except the last block, which may be shorter.
  • Records may not span blocks.
  • All blocks must be even multiples of the record length which is 420 bytes. For example, if the records are blocked at 50 records per block, the block size must be exactly 21,000 bytes.
  • A block must not exceed 32,760 bytes (tape positions).

Back to top

Internet Data Exchange

To exchange files, your financial institution shall:

  • Meet the due date. We conduct exchanges on a quarterly basis. See Schedule for due dates.
  • Use a SWIFT application.
  • Use required layouts.

(Specifications to be provided at a later date by the FIRM Program Administrator.)

Additional Instructions:

  • Financial institutions - Use your financial institution’s name (which can be abbreviated) and FEIN as the file name. If you send more than one file for a particular quarter, you may add an alpha character after the name and FEIN (sequential order: a, b, c, etc.).
  • Transmitters - If the file only has data exchange information for one financial institution, use the financial institution’s name (which can be abbreviated) and FEIN as the file name. If you send more than one file for a particular quarter, add an alpha character after the name and FEIN (sequential order: a, b, c, etc.).
  • Transmitters with multiple participants - If the file has data exchange information for more than one financial institution, use your business name (which can be abbreviated) and FEIN as the file name. If you send more than one file with multiple financial institutions, you may add an alpha character after your business name and FEIN (sequential order: a, b, c, etc.).

The FIRM Program Administrator only accepts .txt and .zip files. The FIRM Program Administrator cannot accept self-extracting zipped files, which end with an .exe file extension.

File names are limited to 32 characters with no spaces between characters in the first name. File transfers will fail if the file name has spaces between the characters.

Back to top

FIRM Program Administrator Contacts

CATAX@informatixinc.com

Phone: 866.576.5986 hours of operation are from 8 a.m. to 5 p.m. Pacific Standard Time

Mail:
CATAX/INFORMATIX
Tax Match Operations
1740 CREEKSIDE OAKS DRIVE, SUITE 175
SACRAMENTO, CA 95833-3639

Fax: 517.318.4696

Replacement Files

The FIRM Program Administrator may request the financial institution to submit a data match replacement file if there were errors encountered while processing the original file. If the FIRM Program Administrator requests a replacement file, it will submit a written request to the financial institution; the financial institution shall return the entire file to the FIRM Program Administrator for processing within thirty (30) calendar days of the date of the written request and in accordance with forms and instructions provided by FTB.

FIRM Record Layouts – Confidential Data

The FIRM Record Layout portion of this booklet is considered confidential data between FTB and financial institutions.  This Record Layout has been removed from this booklet.  To request this information, state the appropriate business need and send your written request to:

ADVISORY, ANALYSIS, AND SERVICES BUREAU MS A243
ATTN FIRM
FRANCHISE TAX BOARD
PO BOX 1468
SACRAMENTO CA 95812-1468

Common Data Match Errors

FTB requires financial institutions to verify the content of their data match files to ensure data accuracy and reduce the need for FTB to return files for correction. Verification is especially important to financial institutions that have their reports prepared by a reporting agent.

FTB returns rejected files with an explanation to the financial institution or the transmitter for replacement. The financial institution shall correct the errors and resubmit the file as instructed in the explanation.

To avoid errors during Internet filing, the financial institution must:

  • Submit a revised FTB 2060 PC, Election, when changing transmitters.
  • Notify the FIRM Program Administrator when there is a new contact for the financial institution.
  • Use specified file formats in the Record Layout Format. Files submitted through the FIRM Internet process must be text files ending with a file extension of .txt, or ending with .zip if the file is compressed.
  • Zip large files to avoid "Run Time Error" results. Zipped files naming conventions must end with a file extension of .zip if the file is compressed. We cannot accept self-extracting zipped files, which end with an .exe file extension.

Back to top

Reimbursement to Financial Institutions

A financial institution may be entitled to reimbursement for submitting the information specified under R&TC Section 19266 and this regulation in the following amounts:

  • Actual costs for FIRM one-time start-up operations of no more than $2,500.
  • Actual costs for FIRM data matching (other than one-time start up operations) of no more than $250 per calendar quarter.

Procedure for Requesting Reimbursement

A financial institution is not entitled to reimbursement unless it has participated in the FIRM data exchange under the written direction and schedule established by the FIRM Program Administrator.  Once the financial institution's participation has occurred under the written direction of the FIRM Program Administrator, a financial institution may submit a completed FTB 2059, Reimbursement Invoice for its initial start-up costs and quarterly data matching no later than (30) calendar days following the end of the state's fiscal year (by July 30).

  • Reimbursement is based on the FIRM data match services performed during the state's fiscal year ending June 30.
  • For quarterly matching that has occurred, up to four quarters may be submitted at one time.
  • Any FIRM reimbursement invoice received after July 30 for the prior fiscal year ending June 30 will not be honored.
  • Financial institutions shall maintain supporting documentation of these expenditures for three years. 

If you want us to reimburse you, you must also submit a completed STD 204, Payee Record, along with FTB 2059 PC, Reimbursement Invoice. We require you to submit STD 204 only once to us.

Back to top

 

Forms

Form Description
FTB 2057, Financial Institution Record Match General Information Booklet This booklet provides a detailed overview of the FIRM Program
FTB 2060 PC, Election Use this form to establish your participation in the FIRM program, method of data matching (Method 1 or 2), and the name of your transmitter if one is used. This form is also used to change the financial institution’s name, FEIN, contact, or transmitter information. Mail completed form to:

CATAX/INFORMATIX
TAX MATCH OPERATIONS
1740 CREEKSIDE OAKS DRIVE, SUITE 175
SACRAMENTO, CA 95833-3639

FTB 2058 PC, Temporary Exemption/Suspension Request Form

Use this form to request a temporary delay or suspension from participating data exchange. Mail completed form to:

ADVISORY, ANALYSIS, AND SERVICES BUREAU MS A243
ATTN FIRM
FRANCHISE TAX BOARD
PO BOX 1468
SACRAMENTO, CA 95812-1468

FTB 2059 PC, Reimbursement Invoice

Reimbursement invoices will be accepted July 1 through July 30. Any FIRM invoice received after July 30 for the prior fiscal year ending June 30 will not be honored. For procedures with requesting reimbursement, refer to Reimbursement to Financial Institutions section above. Mail completed form to:

Accounting & Financial Resources Section
Franchise Tax Board
PO Box 2800
Sacramento, CA 95812-2800

STD 204, Payee Data Record

Complete all information on this form. Sign, date, and return it to this address:

ADVISORY, ANALYSIS, AND SERVICES BUREAU MS A243
FRANCHISE TAX BOARD
PO BOX 1468
SACRAMENTO CA 95812-1468

Back to top

Contact Us

Franchise Tax Board

Email: FTBFIRMhelp@ftb.ca.gov
Fax: 916.843.0267

Mail:
ADVISORY, ANALYSIS, AND SERVICES BUREAU MS 243
ATTN FIRM
FRANCHISE TAX BOARD
PO BOX 1468
SACRAMENTO, CA 95812-1468

FIRM Administrator: Informatix, Inc.

Email: CATAX@informatixinc.com
Fax: 517.318.4696
Phone: 866.576.5986

Mail:

CATAX/INFORMATIX
TAX MATCH OPERATIONS
1740 CREEKSIDE OAKS DRIVE, SUITE 175
SACRAMENTO, CA 95833-3639

Back to top