IRS Tax Relief - CA FTB Tax Debt Forgiveness – Settling California State Tax Debt
Updated: Apr 18, 2019
CALIFORNIA TAX DEBT - TAX RELIEF - TAX FORGIVENESS
Should you be experiencing tax debt issues with the IRS, often tax debts are also owed taxes within the state of your residence. California is a State that aggressively collects taxes from its residents on top of what they owe to the IRS. It’s also possible to have tax debt with the California Franchise Tax Board (FTB) in the absence of any debt to the IRS.
THE CALIFORNIA FRANCHISE TAX BOARD (FTB) IS EXTREMELY DIFFICULT TO WORK WITH, AS CALIFORNIA IS A STATE THAT IS BROKE AND DEEPLY IN DEBT. THE FTB AND THE STATE OF CALIFORNIA NEEDS TO COLLECT EVERY CENT THAT THEY CAN.
Just like the IRS, owing taxes to the California FTB is a serious matter. It’s more than helpful to know your options if you’re a taxpayer that falls into this category.
A taxpayer that owe more than $20,000 should consider contacting the IRS tax relief team at Flat Fee Tax Service, Inc.
If you owe less than 25,000, you may benefit from a CA FTB tax debt forgiveness program. Take a look at your options below.
Tax Debt Forgiveness Options
As per current 2018 California tax law, residents that owe taxes to the FTB have 5 different options for dealing with a tax debt. Understand that not every option offers California (CA) FTB tax debt forgiveness, but they do provide a means of settling your tax debt.
Offer In Compromise.
Installment Agreement with Penalty Abatement if possible.
Hardship Status (Currently not Collectible).
Pay the tax debt in full with Penalty Abatement if possible.
Do nothing and see what happens with collections. Not a good option.
Leaving all the decisions to the California FTB and their collection pursuits is rarely your best option. Like the IRS, the California FTB has the power to issue tax liens that may result in property seizure as covered in the California Taxpayer’s Bill of Rights. The California FTB will also garnish your paycheck and levy your bank account. Follow as we describe the other options in more detail.
California FTB Tax Debt Forgiveness –
Offer In Compromise
An Offer In Compromise is the best option for FTB tax debt forgiveness. The California FTB Offer In Compromise is a settlement agreement between you and the California FTB to settle the tax debt for less than the amount owed. Like the IRS, the CA FTB may accept an Offer in Compromise (OIC) if they believe it is the most they will be able to collect.
The California FTB is more likely to accept an Offer In Compromise if you are older than if you are younger. Just like the IRS, the CA FTB is going to look at your income, expenses, assets, and potential future income in their determination. If you owe more than $20,000 to the FTB it is strongly recommended to hire an experienced IRS Tax Lawyer to handle it for you.
California FTB Installment Agreements
The California Franchise Tax Board does make Installment Agreements (#installmentagreements) available to residents that owe back taxes. It’s not a form of tax forgiveness because you end up paying the full amount with interest and penalties combined.
An Installment Agreement requests done online are typically accepted as long as the amount owed is less than $25,000. In the online Installment Agreement request form, there is a financial disclosure section and taxpayers may propose a monthly payment amount.
Note that it is possible to make a request for a Penalty Abatement from the Franchise Tax Board. This is a form of CA FTB tax debt forgiveness, though you will have to provide good cause as to your inability to file and pay on time.
THE CALIFORNIA FRANCHISE TAX BOARD IS EXTREMELY AGGRESSIVE.
Can You File For Hardship With
The CALIFORNIA FTB?
The CA FTB collections department will place your account into a hardship (Currently not Collectible) status if you qualify. You have to prove you cannot or can barely cover your basic living expenses based on reasonable expenses. The California FTB will look at your expenses and determine if they are reasonable. If so and you are barely making it at the end of the month or in the red, your account can be placed into Currently not Collectible hardship status. The information is given by providing Form FTB 3561 and the supporting documents listed at the end of it.
The California FTB hardship expires one year after the date of its approval in most cases. You can resubmit before the expiration of the hardship. The FTB has 20 years to collect on a debt in most cases. Time is ticking while in hardship, but it is a long way to expire. Most people qualified for hardship have a good chance at Offer In Compromise.
Call our IRS tax relief team to find out if you qualify for Currently not Collectible hardship status.
THE IRS TAX RELIEF TEAM AT FLAT FEE TAX SERVICE, INC. HANDLES BOTH IRS PROBLEMS AS WELL AS THE CALIFORNIA FRANCHISE TAX BOARD.
OUR MAIN IRS TAX RELIEF TEAM IS LOCATED IN SAN DIEGO, CALIFORNIA AND WE REPRESENT TAXPAYERS WHO HAVE TAX DEBT THROUGHOUT THE USA.
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