Tax News
Ask the Advocate

Steve Sims, Taxpayers' Rights Advocate.

Change Lien Thresholds

In my 2010 Annual Report to the Legislature, I asked the department to take a look at the lien program and I recommended, prior to filing a lien, we determine if the benefits of filing a lien outweighed the harm to the taxpayer. During the 2011 Taxpayer Rights Advocate meeting, FTB was also encouraged by practitioners to review the guidelines for filing liens and consider the minimum dollar amount at which a lien was filed. In response, the department evaluated and reviewed the effectiveness of the lien program, including the impact of our current dollar amount guidelines for filing liens. As a result of this review, we increased the general guideline amount for filing a lien from $1,000 to $2,000 beginning in July 2013.

One of the major benefits to doing this is that we reduce the number of liens filed. By reducing the number of liens filed, we will also reduce the number of:

  • Negative marks on a taxpayer’s credit bureau report.
  • Telephone and written contacts to FTB.
  • Liens filed in error.
  • County recorders workload impacts.

It is important to remember that this change will only apply to new liens filed. In addition, the change is only to the guidelines for filing liens. It will not affect lien releases. Therefore, if you have a client with a valid lien in place on a tax liability between $1,000 and $1,999, the lien will not be released due to this new change. Also, it is important to remember that the $2,000 amount is a guideline only; while we generally will not file a lien for balance less than this amount, we reserve the right to do so based on individual facts and circumstances.

Steve Sims, EA
Taxpayers' Rights Advocate

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