We’ve discussed before the differences between a lien and levy. A lien is a mechanism often used by the Internal Revenue Service or California Franchise Tax Board to create a legal attachment to your property in order to secure an interest. The IRS and Franchise Tax Board often use liens to secure tax debts.
Conversely, a levy is the process by which the lien holder actually takes property from you to collect on a debt. A levy can be executed on a variety of your assets, including bank accounts, vehicles, wages, home, and other personal property.
California has been increasing its collection efforts
Either more California residents owe money to the State or the State has been increasing its collection efforts because California has plans to send more levy notices to residents. For the most recent fiscal year, California’s Franchise Tax Board has been planning for a projected increase in levies from 1.2 million to approximately 1.7 million levies. As result of these increased efforts, more California residents should expect to receive levy notices.
The California Franchise Tax Board issues levies to collect the entire amount of back taxes, penalties, fees, and other interest. Under limited circumstances, the FTB may reduce a levy amount.
How to resolve a California FTB levy?
The FTB is preparing for the expected increase in levy notices by making sure that contact centers are ready to handle the influx of levy notices. The quickest way to resolve a lien and a levy is to immediately pay the delinquent balance. The FTB has facilitated this process by allowing various payment options, including online payment using a checking or savings account or a credit card. Payment can also be made by calling the FTB’s toll-free phone number or by visiting one of the FTB’s several field offices.
The FTB does permit payments to be made in installments over time if an individual has a demonstrated financial inability to immediately pay an entire delinquent amount. According to the FTB, it will “generally approve monthly payment plan requests if the balance owed is $25,000 or less and can be paid within 60 months.”
Sometimes, the FTB may erroneously send a levy notice. If you believe that the FTB has sent you a levy notice in error, you should contact a California tax attorney to help you resolve this issue with the FTB.
Contact a California tax attorney today
If you have any questions regarding Franchise Tax Board or Internal Revenue Service liens or levies, an experienced California tax attorney can help answer your questions. Receiving a levy notice from the FTB or IRS can be a stressful event. Furthermore, it is imperative that you act quickly to remove any liens attached to your property because liens can impact your credit and hinder your ability to obtain a loan or refinance one.
The law firm of Janathan L. Allen, APC has significant experience helping clients resolve liens and levies. Contact our attorneys today for a free case consultation to see how we can help you with liens placed on your property. Our California tax attorneys are located in several offices throughout Southern California.
