FTB Bank Levy – What It Is and How to Stop It in California
If you owe back taxes to the California Franchise Tax Board (FTB) and ignored their notices, you may wake up one day to find your bank account frozen. That’s the power of an FTB bank levy — and it can cause instant chaos for both individuals and business owners.
But don’t panic. You may still have time to stop the levy or recover your funds — if you act fast.
In this article, we’ll explain:
- What an FTB bank levy is
- How it’s different from a lien
- When and why the FTB levies your account
- How to stop or reverse a levy
- What to do if you can’t pay in full
What Is an FTB Bank Levy?
A bank levy is a legal tool that allows the FTB to seize money directly from your checking or savings account. It is not a judgment or a lawsuit — the FTB can issue levies administratively under California law.
How it works:
- The FTB sends an
Order to Withhold to your bank
- Your bank must freeze the account for
10 days
- After 10 days, the bank sends the funds to the FTB
- You may not get a second warning
Levies can drain your account without notice and leave you unable to pay rent, payroll, or basic bills.
FTB Bank Levy vs. Lien – What’s the Difference?
| Feature | FTB Bank Levy | FTB Tax Lien |
|---|---|---|
| Action | Takes money from your account | Attaches to property as a legal claim |
| Visibility | May go unnoticed until it hits | Public record (affects credit & property) |
| Timing | Usually after a series of notices | May be filed earlier in the collections process |
| Goal | Immediate collection | Secures future collection or pressure |
Key Insight: A lien doesn’t take your money — a levy does.
Why Did the FTB Levy My Bank Account?
Common triggers include:
- Unpaid personal income tax
- Past-due business entity tax (LLC or S-corp)
- Franchise tax debt for suspended corporations
- Ignoring notices like FTB 4905 or 4930
- Failing to respond to payment plan offers
The FTB typically sends at least two warning letters — but if you ignored or didn’t receive them, the levy could catch you off guard.
How to Stop an FTB Bank Levy (Step-by-Step)
1. Call the FTB Immediately
You must speak with the FTB
before the 10-day bank hold expires.
Use the number on the notice or call 800-689-4776 for individual accounts.
2. Request an Urgent Levy Release
Explain why the levy causes undue hardship and provide proof:
- Rent or mortgage obligations
- Payroll checks due
- Medical or childcare costs
- Bank statements showing low balance
3. Submit a Payment Plan or OIC Application
If you can’t pay in full, propose:
- An
Installment Agreement
- An
Offer in Compromise (OIC) (if debt is unaffordable)
Both can support a request for levy release or pause further action.
4. File a Financial Hardship Request
The FTB may temporarily suspend collection if:
- You have no disposable income
- You’re receiving government assistance
- Collection would make you homeless or destitute
Supporting documents are required.
Can You Recover Money Already Sent?
Yes — in limited cases:
- Mistaken identity (wrong taxpayer)
- Funds were exempt (e.g., Social Security, disability)
- Lack of prior notice or due process
Request a refund or appeal the levy, but act quickly.
Work With a CPA Who Knows the FTB
At Boulanger CPA, we help clients across California:
- Stop levies before they hit
- Request urgent levy releases
- File hardship claims or settlements
- Negotiate tax resolution strategies that work
📞 Call 657-218-5700 or Schedule a Consultation
Frequently Asked Questions
What is an FTB bank levy?
An FTB bank levy is when the Franchise Tax Board freezes and withdraws money from your bank account to satisfy a tax debt. It usually comes after multiple notices are ignored.
How do I stop a California FTB bank levy?
You must call the FTB immediately, request a hardship-based release, and provide financial documentation. You can also submit a payment plan or Offer in Compromise.
How long does the FTB give before taking funds?
Your bank will hold the funds for 10 days after receiving the levy order. You must act during this window to request a release.
What if the FTB already took my money?
You may be able to request a refund if the levy was issued in error, the funds were exempt, or you didn’t receive proper notice.
Will the FTB release a levy if I start a payment plan?
In many cases, yes. If you show a good faith effort and propose a reasonable resolution, the FTB may lift or pause collection actions.
📣 About the Author
Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, a boutique tax resolution firm based in Orange County, California and trusted by high-income individuals and business owners across Southern California.
He is the author of Defend What’s Yours: A California Taxpayer’s Guide to Beating the IRS and FTB at Their Own Game, available now on Amazon. The book offers a step-by-step plan for resolving IRS and FTB tax debt without losing your business, your home, or your peace of mind.
With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.
Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.
Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.
📍 Learn more at www.orangecounty.cpa or call (657) 218-5700.
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