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California Franchise Tax Board “Tax News” message to Tax Practitioners on Notice on State Tax Liens

Information about the notice, prevention, and resolution.

The issuance of a Notice of State Tax Lien (NSTL) is a protective action taken by us to encumber property that could be used to satisfy delinquent liabilities owed to the state of California and to secure a position of priority among other creditors.

We continue to monitor the number of liens recorded or filed annually and pursue efforts to contact taxpayers early in the collection process to educate and encourage compliance prior to issuing an NSTL.

We implemented the FTB 4932, Intent to Record a Notice of State Tax Lien, in December 2014 in an effort to increase taxpayer awareness, increase compliance, and provide education on the negative impacts from the filing of a state tax lien as well as reduce the number of state tax liens issued. The notice clearly identifies consequences of a recorded Notice of State Tax Lien and indicates if payment in full is not received within 30 days from the notice date, that “we intend to record” a Notice of State Tax Lien against their property.  This additional education and outreach can increase taxpayer awareness, increase taxpayer compliance, and reduce the number of involuntary collection actions taken on an account.

How your clients can prevent a lien

  • File required tax returns timely or provide proof that there is no filing requirement.
  • Pay the tax liability in full when it becomes due or enter into a qualifying installment agreement.
  • Ensure sufficient withholding or estimated tax payments.
  • Respond to all FTB notices received to make sure the tax matter has been resolved.
  • Maintain a current address with us.
  • Verify tax documents (such as W2, 1099, K1, and tax returns) have the correct identifying numbers and information.

How to resolve a lien

To get a lien released, pay the total tax liability (including any penalties and accrued interest) for the tax year(s) included on the lien. If your client is not able to pay the tax liability, contact us to discuss available options.  Use our website to find the best way to contact us.

For more information click here:

www.ftb.ca.gov/professionals/taxnews/Editions/2018/May.shtml#Article04

steve@stevesimsea.com