Delinquent Taxpayer List

The California Franchise Tax Board or FTB publishes a list of the top 500 largest past due tax balances in the state.  Any taxpayer who owes $100,000 or more to the Franchise Tax Board is at risk of appearing on the top 500 delinquent taxpayer list, known as the FTB 500 list.  Appearing on the list not only involves potential embarrassment, but it also means the taxpayer could potentially lose any state issued licenses.  The FTB is scheduled to publish the FTB 500 list again this October.  This means a person on the FTB 500 list can lose their driver’s license as well as any state issued professional license, such as a law license, contractor’s license, or real estate license. 

The most obvious way to stay off the FTB 500 list is to pay your state income taxes.  I know this is often easier said than done and while people run into personal circumstances that make paying income taxes difficult, nevertheless one should make a high priority of paying FTB taxes.  You may think you cannot afford to pay your state income taxes, but you know you cannot afford to lose your license!

If you are in danger of appearing on the list, chances are you are not going to be able to solve your tax problems overnight.  Your tax problems took years to create and are frankly going to take time to correct the issue.  This does not mean all hope is lost if you are unable to quickly come up with the $100,000+ you may need to full pay your balance.

The fact is there are many taxpayers who owe enough to appear on the FTB 500 list, but they do not appear on the list.  While our firm represents a few clients who should appear on the list, they still have their driver’s licenses and other state issued licenses.  These people are not on the list because they have addressed the issues and entered into a payment plan with the Franchise Tax Board.

Obtaining a payment plan requires providing a full financial disclosure.  The FTB will arrange a monthly payment based on the taxpayer’s monthly income and expenses.  Once a plan is in place, it is imperative the taxpayer remains in compliance going forward.  Among other things, they should remain current with estimated tax payments and file all future returns on time.  While other taxing authorities are more amenable to allowing a taxpayer to renegotiate installment agreements after a default, the FTB is less forgiving when it comes to an out-of-compliance installment agreement.  In short, if you dodged a bullet by getting on a payment plan make sure you pay your California state income taxes! 

RJS LAW has helped many clients with FTB tax problems as well as tax problems with the IRS and other tax agencies.  For a free consultation, please contact our firm on the web at RJS LAW or by phone at 619-595-1655, if you are concerned you may appear on the FTB 500 list. All is not lost, and we can help you get past this!