With the April 15 tax deadline just days away, the state Franchise Tax Board urges financially challenged taxpayers to contact the FTB for assistance.
"There may be people waiting until the last minute, who realize they can't pay what they owe," said FTB spokesman Daniel Tahara. "The most important thing is not to ignore it, because interest and penalties mean you could pay significantly more. We want people to know there's help available."
Among the options:
File your return
Even if you can't pay the full amount owed, filing your state tax return and making a partial payment will usually reduce later penalties and interest. After the tax return is submitted, the FTB will send a "Statement of Tax Due." Taxpayers can then determine what forms of FTB assistance will help pay off the amount owed.
If the balance owed is less than $25,000 and can be paid within 60 months, the FTB usually allows taxpayers to set up a payment plan. Tax liens are not typically filed against taxpayers using payment plans. An installment agreement can be requested online or by calling (800) 689-4776 for help in English and Spanish.
An Offer-in-Compromise plan is an agreement between a taxpayer and the FTB that settles the taxpayer's tax liabilities for less than the full amount owed. It's intended for taxpayers who do not have (nor will have in the foreseeable future), the income, assets or means to pay their tax liability. The FTB reviews the taxpayer's income and assets to determine if an OIC is appropriate. It can take 90 days or more for a review to be completed.
Help with State Tax Liens
If you have a state tax lien and are trying to sell/refinance your home, the FTB can help. Typically, state tax liens must be paid before real estate can be sold or refinanced. If a taxpayer facing financial hardships is selling or refinancing a home for less than the loan balance, the FTB can remove the tax lien and allow the sale to be completed. However, a tax lien would remain in effect on any other property the taxpayer holds or later acquires.