FTB Offers Assistance to
Taxpayers in Financial Stress
Some of your clients may be facing financial difficulties so remind them FTB has help available. We continually seek to improve the efficiency of our collection process with the goal of working with taxpayers as soon as a tax delinquency occurs rather than through involuntary collection actions.
Our collection specialists can assist taxpayers by delaying collection actions when warranted, establishing payment plans, or granting relief from state tax liens. Programs to reduce tax debt such as "Offer in Compromise," establishing a taxpayer as an "Innocent Spouse," and working with taxpayers declaring bankruptcy are also options for some people.
We generally grant relief from state tax liens within two weeks for financially distressed homeowners trying to sell or refinance their homes. When a home sells for less than the loan balance, we sometimes remove a tax lien to allow the homeowner to complete the sale. Tax liens typically must be paid before a real estate escrow can close. The tax lien remains in effect on any other property the taxpayer currently holds or later acquires.
We also help individuals with financial hardships who are refinancing or modifying an existing home loan. Homeowners can request the new or modified loan have priority over the tax lien. This allows prior home loans to be refinanced or modified without first having to pay the lien.
State Tax Refunds Delay due to the state's persistent cash and budget problems, the State Controller announced on Friday, January 16, 2009 that he will have to delay refunds for 30 days starting February 1, 2009 for Personal Income Tax and Business Entity taxpayers.
We are still processing returns as normal. However, it is likely this delay will affect state refunds for most early filers. Returns that have not completed processing before February 1, 2009 will have their refunds held for 30 days.
This applies to all refund types. Delayed Direct Deposit Refunds (DDR) will be electronically transmitted when funds are available.
We will update our website with frequently asked questions as further information becomes available.