Like other states, levies are issued after the submission of final notice to taxpayers in California. Keep reading to learn about how to stop California State Tax levy.
Such notices are usually sent for alerting taxpayers about the balance resolving issues. The matter can be resolved if and only if either you or your attorney call for resolving the balance. You know what levy results are on any bank account from which you ever received 1099. California Franchise Tax Board lien is often filled up when not filed.
The higher authority California FTB can collect tax through the bank levy according to the California Revenue and Taxation Code Sections 18670 and 18817. You will be shocked to know that FBR is authoritative to take even 100% of your balance directly from your bank account. Besides this, the California FTB can garnish your income, file tax liens, and wages against your property while collecting tax liabilities.
Ways of Stopping California State Tax Levy on Bank Account
In view of this, you should take action against the debt and consult a tax attorney for resolving these things. If you don’t take notice, your bank account will be at risk of an FTB levy. Now you might be thinking about the actions that tend to stop levy from happening firstly. Well! The FTB levy on your bank account will stop only when your case is resolved. It is hard to stop collection action as it will not hamper even after filing an Offer In Compromise form.
The following are some common ways through which you can resolve your balance and stop California state tax levy on your bank account from the FTB.
- File Bankruptcy – Stops the FTB from starting any collection action.
- Hardships Request – A kind of appeal to temporarily stop or delay the tax debt collection for 6 months or a year.
- Offer In Compromise – Settlement with the FTB for paying a lesser sum.
- Pay In Full – Involves the payment of the full debt at once.
- Payment Plan – Includes the debt payment in various installments such as monthly.
Hardships Request – A kind of appeal to temporarily stop or delay the tax debt collection for 6 months or a year.
There is also the option of filing a hardship request. This is a kind of appeal to temporarily stop or delay the tax debt collection for 6 months or a year. You can file this request if you can show that you are unable to pay your taxes due to some type of financial hardship. The hardship must be something that is beyond your control, and you must provide proof to support your claim.
Offer In Compromise – Settlement with the FTB for paying a lesser sum.
Offer in compromise is a way of settling a tax debt with the FTB. It’s a program that allows you to work something out on your own without going through the court system. You have to show that you can’t afford to repay the entire amount that is owed, and that this would severely impact your future ability to pay any taxes in general.
Pay In Full – Involves the payment of the full debt at once.
This is the worst option to choose if you can’t afford to pay all of your taxes right away. The FTB will take any future refunds that you are owed, and they also may garnish your wages.
Installment agreement – Includes the debt payment in various installments such as monthly to the FTB
One option that might work for you is an installment agreement. This includes the debt payment in various installments, such as monthly. One of the reasons why this may be a good option for you is because it’s easier to manage your payments without breaking your budget.
You should wait to file for bankruptcy if the only issue with filing taxes is that you owe money to the FTB. You should wait until after you’ve filed your taxes and gotten the notice of determination letter before you choose bankruptcy over an installment agreement.
File Bankruptcy – Stops the FTB from starting any collection action.
File bankruptcy if a tax lien is going to be a major issue. Filing for bankruptcy will stop the FTB from taking any further collection actions against you and will reduce your taxable income by wiping out most of your debt.
Above all, the best form of stopping or canceling California tax debt is Offer In Compromise. It is actually the forgiveness of a part of the debt to the tax debt owner but everyone cannot qualify for this option.
How to Resolve California Franchise Tax Board Levied on your Bank Account?
When your bank account is levied, it becomes very difficult to release it. In the majority of levy cases, the seizure of funds, collections, income, and money has been observed. When the Franchise Tax Board issues orders of withholding funds, banks keep them held for 10 days before transferring to the California FTB.
No worries if you cannot arrange debt amounts and want to stop your funds from seizure, you can do so by demanding an extension. While talking about money extension with FTB agents, try to convince them to release the levy from your bank account. Yes! It’s possible but only in a few cases.
Here are three main options that you can use for releasing a California State tax Levy.
Show that Money doesn’t Belong To You
When you will be able to show that the money present in your account is not yours, you will be able to release the levy. Do you wonder about How will you release the California state tax levy? Well! Just prove that your siblings or any relative deposited money in your account for saving. In order to avail of this kind of levy release, you should have documented proof.
Prove Genuine Financial Hardships
Though releasing the FTB levy from your bank account by financial hardship is quite tough, it is still possible. Due to the difficulty of proving financial hardships, the California Franchise Tax Board rarely releases levies from your bank account. In some cases, the FTB approves your financial hardship and qualifies you only for a year. It doesn’t show that your levy is released but delayed until the betterment of your financial issues.
Show that Funds are Exempt From The FTB levy
Another possible way of releasing your bank account from a California state tax levy is to prove that your funds or income are exempted from the FTB levy. As the veterans’ benefits and social security income are exempted from the FTB levies, you only need to show that your funds and money belonged to these sources. After getting proof, contact the tax attorney and your bank levy will be released.
In short, it is possible but difficult to release the California State Tax levy on the bank account. Besides these options, there are some other strategies that can be helpful in getting levy release from the FTB. Make sure that you have all the proofs showing you eligible to get levy bank release.
You can choose My Tax Settlement Services to help you stop a California state Tax levy on your bank account. Our tax professionals are more than ready to serve you!