One of the most common problems we help our clients address at our tax law offices in San Diego and Orange County is taxes owed to the California State Board of Equalization. In this blog post we’ll take a look at the five best ways to address that issue and resolve them in a timely manner. If you live, work or do business in California, it’s very likely that you’ll pay a tax bill through the California State Board of Equalization (BOE).
The BOE is the public agency charged with tax administration and fee collection in the state of California. It’s responsible for collecting sales and use taxes, property taxes and special taxes and fees. It also handles appeals for franchise and personal income taxes that are collected by the Franchise Tax Board. That means the BOE collects all state sales taxes and fees generated by businesses as well as property taxes for residential and commercial real estate.
But just like personal taxes, there are times when people just can’t pay the money they owe to the BOE. Here are some guidelines to help you if you find yourself in that situation.
#1- File Your Returns, Even if You Can’t Pay The Full Amount Due.
One of the most common errors our tax specialists deal with is people who believe that because they can’t pay the full amount due, they can’t file their returns.
This is a serious mistake that can open you up to not only fines and penalties but possible criminal charges for tax evasion as well. Failure to file the proper returns can also put your business in jeopardy. The best course of action is to always file your returns on time.
It’s important to note that different types of businesses and entities have different tax reporting requirements. Some may be required to file monthly returns or even pre-pay while others may only be required to pay on a yearly basis. For a more in-depth explanation of your reporting and payment obligations, refer to the Board of Equalization website.
#2-Pay As Much As You Can, As Soon As You Can.
Penalties and interest accrue when you miss filing deadlines. The more you can pay on-time, the less the resulting tax bill will be. You can substantially reduce additional payments by paying as much as possible by the due date. One often overlooked payment method is to charge the taxes owed to a credit card. Even a high-interest card will most likely cost less than the added interest and penalties incurred by late payments.
Using a credit card can also help protect your credit and avoid negative comments on business rating services such as Dun&Bradstreet . Talk to your tax advisor about your options.
#3-What Happens if I Just Can’t Pay?
Sometimes despite our best intentions it becomes impossible to pay the full amount due to the BOE. If you’re caught in this situation the most important thing to remember is communication. Ignoring the BOE demands for payment will lead to increased interest payments and increasingly severe penalties, including:
• Written notifications
• Telephone calls
• In-person visits
• Property, bank account, salary and wage levies.
• Property Liens
• Revocation of seller’s permits
• Revocation of other business licenses
• Revocation of Driver license, contractor’s license.
In some cases, if there’s reason to believe an individual or business has deliberately tried to avoid paying taxes due, the BOE could open criminal cases for tax evasion.
The best way to avoid problems is to make sure you’re communicating.
In certain instances you may be able to set-up a payment plan to settle a tax debt with the BOE. This may be the best route to take to avoid additional penalties and interest.
For simple tax debts, applying on-line is straightforward. You fill out the application, select the amount you’re proposing to pay and how often (weekly, bi-weekly or monthly) and submit your application. You can expect a quick answer. But many times tax issues can be complicated and you’ll need the experienced advice of professional tax firms such as RJS LAW. Our seasoned tax attorneys and staff deal with the BOE on a regular basis and our team knows how to properly structure tax payment plans to maximize acceptance.
There are no outcome guarantees and every case is different but our team will work to make sure your complicated tax situations with the BOE are addressed in a way that makes sense for you. Of course just like any other government programs there are eligibility requirements. These don’t mean you’re not eligible for a payment program, it just means that it will take some negotiation on your behalf to get a payment program set-up.
Accounts with any of these conditions are not eligible to apply online:
• You recently submitted or currently participating in our Offer In Compromise program,
• Your account is in bankruptcy, probate, or receivership,
• You have a pending or existing approved payment plan, or
• Your seller’s permit or license has been revoked.
To confidentially discuss your tax issues and determine whether a payment plan with the BOE is right for you, contact or call us today at (619)-595-1655 for a free half-hour consultation with our tax specialists.
#5-Offer in Compromise
In some cases, the BOE may settle tax debt for less than the amount due. This is what’s known as an Offer in Compromise (OIC). In general, an Offer in Compromise may be accepted if the BOE determines there’s no realistic chance of collecting the full-amount due. The BOE will look at the total amount due, your wages, income, potential future earnings and assets and then make a determination.
There are no guarantees that an OIC will be accepted. The RJS LAW team has a deep understanding of the requirements and what the BOE is looking for and we can offer professional assistance to help maximize your chances of success with the BOE.
The most important thing to remember when dealing with the California Board of Equalization is to do everything in your power to pay any taxes or fees before they’re due. But you should also remember that if you can’t pay the full amount on time you do have options. The worst thing to do is ignore the problem. RJS LAW and its team of tax experts in San Diego and Orange County are here to help. Call us today at (619)-595-1655 or contact us online for your confidential free consultation.
This blog post is not intended as legal advice and should be considered general information only. If you have tax or business related questions or if you have received any types of notices from either the IRS, the California Franchise Tax Board or the California Bureau of Equalization, contact the tax professionals at RJS LAW today.
Our team constantly stays updated on the latest tax issues and we can help you sort through your options. We have convenient offices in Los Angeles, Orange County and San Diego and we can help. For a free consultation call us at (619)-595-1655.