State tax help available for financial hardship

SACRAMENTO — Taxpayers who do not have the ability to pay their taxes because of a financial hardship should contact the Franchise Tax Board  for assistance. FTB has many options to help taxpayers handle their tax bills.

FTB can assist those with financial hardships by establishing payment plans, and sometimes delaying collection activities. The number of taxpayers seeking relief through payment plans has increased 20 percent from last year and nearly 150 percent over the last five years.

Payment plans

FTB generally approves monthly payment plan requests if the balance owed is less than $25,000 and can be paid within 60 months. FTB generally does not file liens on these taxpayers’ accounts.

Taxpayers can set-up payment plans online at ftb.ca.gov (select payment options) or, new this season, by calling our automated phone line at 800-689-4776. Payment plans are available in both English and Spanish. FTB also allows enrollment while delinquent returns are in the process of being completed and sent to FTB (Provisional Payment Plan). Taxpayers requesting a provisional payment plan should call 800-689-4776.

State tax liens

State tax liens typically must be paid before real estate can be sold or refinanced. If taxpayers are looking to refinance or sell a home and there is a state tax lien filed, there are options. Taxpayers, their representatives, or their lenders, may request that FTB “subordinate” or make a tax lien secondary to the lien of the lending institution that is refinancing or restructuring a loan. When a home is selling for less than the loan balance, FTB can remove its tax lien from the property to allow the homeowner to complete the sale.

Financially distressed taxpayers trying to sell their homes can be relieved of the tax lien within two weeks of submitting their required documents to FTB. The tax lien remains in effect on any other property the taxpayer currently holds or later acquires.

Offer in compromise

For some situations, taxpayers may qualify for the Offer in Compromise (OIC) program. An OIC is for taxpayers who do not have, and will not have in the foreseeable future, the income, assets, or means to pay their tax liability.

The program allows taxpayers to submit an application and offer a lesser amount for payment of a nondisputed final tax liability. FTB will consider the taxpayer’s unique set of facts and circumstances and generally will approve an offer when the amount offered represents the most FTB can expect to collect within a reasonable period of time.

More information is available at FTB’s website,ftb.ca.gov, underpayment options. For lien or OIC information, type “lien” or “OIC” in the search box.

Taxpayers who cannot resolve their accounts online should call the phone number listed on their billing notices.