You Owe Taxes for 2024

The October 15^th, 2025 tax deadline just expired.  Many taxpayers have filed their IRS or Franchise Tax Board (FTB) tax returns only to realize they owe a significant amount of money.  Given the financial pressures many businesses and families are facing these days, they may not be in a position to pay their 2024 IRS or FTB obligations.  So, what comes next if you owe IRS or Franchise Tax Board (FTB) taxes for 2024?

Taxpayers owing money to the IRS or FTB will eventually find themselves in collections with those agencies.  The FTB is generally more aggressive and usually starts collections first even when there is no Federal Government shutdown.  (While the Federal Government shutdown has largely brought IRS operations to a halt, state agencies such as the FTB are still very much up and running). 

If you owe money, both the IRS and FTB will send a “Notice and Demand” letter informing the Taxpayer of a balance owed, making a demand for the Taxpayer to pay the tax owed.  The FTB will then send a “Notice Before Levy and Lien” which serves as a final warning before the FTB begins involuntary actions such as levies and liens.

After the “Notice and Demand,” the IRS will send a CP504 or CP504B notice.  This notice is titled “Notice of Intent to Levy.”  It is the last warning the IRS will send before it files a Notice of Federal Tax Lien against a Taxpayer.  However, the IRS is required to send one more notice, a “Final Notice of Intent to Levy” before it levies a taxpayers bank accounts, wages, or other assets. 

The best strategies for dealing with any tax balance is to be proactive.  The sooner a taxpayer acts and engages the IRS and FTB, the better position the taxpayer will be in to avoid unfavorable consequences such as wage garnishments, bank levies, and tax liens.  Ultimately, a taxpayer’s ultimate goal should be getting into some sort of payment arrangement with the IRS and FTB that best fits into their budget. 

Taxpayers should also look to correct the problems that caused the tax balance to accrue in the first place.  Among other things, taxpayers should ensure they are making all of their required quarterly estimated tax payments to the IRS and FTB.  Taxpayers receiving W-2 wages should also review their payroll stubs and make sure adequate withholdings are being withheld from their paychecks. 

It is always best to file and pay taxes on time.  However, unexpected issues often prevent people from timely meeting their tax obligations.  The IRS and FTB offer various payment arrangements taxpayers may use to address their outstanding tax balances.  While nobody enjoys having an extra monthly bill to pay, the situation can be made manageable, and tax problems can be conquered one small step at a time.

At RJS LAW, we have decades of combined experience helping clients navigate tax debts with the IRS, FTB, and other taxing authorities.  Please  contact us at 619-595-1655 or on the internet at RJS LAW, and one of our licensed attorneys give you a free, candid, and realistic assessment of your tax debt problems.   Depending on the amounts owed, we can provide a realistic assessment of available payment plan options, discuss how to handle  your tax debt  by yourself, or work with you to resolve your outstanding issues.

Written by Joseph Cole, Esq., LL.M.