Help with bankruptcy

Bankruptcy estate

A bankruptcy estate is created when an individual files a Chapter 7 or Chapter 11 in the bankruptcy court. It is considered a separate taxable entity. Income earned from the individual’s assets during the period of administration of the estate is taxable to the estate. Bankruptcy estates generally have the following basic elements:

  • Bankruptcy
  • Administrator of the estate (Trustee for Chapter 7 and Debtor in Possession for Chapter 11)
  • Income earned from the estate
  • Property sold during the bankruptcy

A bankruptcy estate has the same requirements, forms, and due dates as estates. Visit Estates and trusts for more information.

Refunds

If you expect a refund, what happens to your refund depends on the refund tax year and when the debt was added.

Refunds and bankruptcy
Refund tax year Tax year of the debt What happens
Any year before you filed for bankruptcy Any year before you filed for bankruptcy We have the right to take this refund to pay towards this tax debt (as usual)
Any year before you filed for bankruptcy Any year after you filed for bankruptcy We will not take this refund to pay this tax debt. It may be considered an asset during bankruptcy.
Any year after you filed for bankruptcy Any year before or after you filed for bankruptcy We may not take this refund to pay any tax debt until your bankruptcy case is closed. We may have authority to:
  • Hold this refund
  • Issue this refund to you (or someone authorized to receive it)

If you owe for any year after you file for bankruptcy, contact us.

Liens and bankruptcy

If you have real property that had a recorded state tax lien before you filed bankruptcy, that lien may remain on your real property even if the personal liability for the debt is removed. To resolve this issue or receive specific information, contact us.

Examples of real property:

  • Vacant land
  • Buildings
  • Homes

If you disagree with your debt

If you have questions regarding your debt, including bankruptcy disputes, claims issues, or other reasons, contact us. It may be possible to resolve the issues without court intervention.

How to serve us

If you decide to take legal action, you are required to serve us:

Serve us by mail (if allowed)
Franchise Tax Board
Chief Counsel
General Counsel Section MS A260
PO Box 1720
Rancho Cordova CA 95741-1720
Serve us in person
9646 Butterfield Way
Sacramento CA 95827

And fax or mail a copy of the service papers to the bankruptcy unit.

Prompt determination (505(b))

Under Bankruptcy Code 11 U.S.C. 505(b), your bankruptcy representative (trustee or chapter 11 debtor in possession) may request a faster formal review (prompt determination) of any unpaid tax debt of the bankruptcy estate for any tax year during the case.

To submit this request, gather:

  • A copy of the completed tax return
  • A cover letter requesting a prompt determination

Mail these items to:

Franchise Tax Board
Bankruptcy Section MS A340
PO Box 2952
Sacramento CA 95812-2952

You may find it helpful to review your tax account (balance, debts).

Online
Log into MyFTB
Phone
(800) 852-5711

Closing (dissolving) a business

If your business is closing (dissolving or liquidating), your business is required to:

  • File all required tax returns and pay us any outstanding taxes, penalties, and interest
  • File a final/current tax return with us
  • File the appropriate forms with the California Secretary of State to formally dissolve

Visit Guide to Dissolve, Surrender, or Cancel a California Business Entity (FTB Pub 1038) for more information.

Contact us about bankruptcies

Phone
(916) 845-4750
Fax
(916) 845-9799
Mail
Personal Bankruptcy
Franchise Tax Board
Personal Bankruptcy MS A340
PO Box 2952
Sacramento CA 95812-2952
Business Bankruptcy
Franchise Tax Board
Business Entity Bankruptcy MS A345
PO Box 2952
Sacramento CA 95812-2952

Provide us with your case number or a copy of your petition.