Can You Get a Payment Plan After an FTB Levy
It’s Not Too Late — You Can Still Get a Payment Plan
If the California Franchise Tax Board (FTB) has already levied your bank account or garnished your wages, you may think your chance to work out a payment plan is gone.
It’s not.
The truth is, you can still set up a payment plan after an FTB levy — but time and strategy matter.
In this guide, we explain what an FTB levy means, whether you're eligible for an Installment Agreement afterward, and how Orange County taxpayers can stop further enforcement.
What Is an FTB Levy?
An FTB levy is a legal action where the state:
- Seizes funds from your bank account
- Garnishes your wages through your employer
- Intercepts state-issued refunds or payments
Unlike the IRS, the FTB doesn’t require a court order to issue a levy, which is why it’s critical to see where levies fit into the collection process and take action before things escalate.
👉 What the FTB Can and Can’t Legally Seize
What Triggers a Levy?
Levy action typically follows:
- Multiple ignored notices
- A Demand for Payment
- A Final Notice Before Levy
- Failure to respond to a Notice of Proposed Assessment
- Default on a previous payment arrangement
The best way to
avoid levies by negotiating early is to engage with the FTB before you reach this stage.
Can You Get a Payment Plan After an FTB Levy?
Yes — but you must act quickly and strategically.
The FTB allows taxpayers to request an Installment Agreement, even after levy action has begun. In many cases:
- The levy can be released or paused once a payment plan is in place
- Future levies can be avoided
- You can regain financial control without paying the full balance upfront
Before you start, make sure you know what assets are at risk before negotiations so you can protect them during discussions.
👉 FTB Offer in Compromise vs Installment Agreement – Which Is Better?
What’s the Difference Between a Levy and a Lien
| Levy | Lien |
|---|---|
| Seizes money directly | Creates a legal claim on property |
| Happens without court order | Filed publicly with the county recorder |
| Can be reversed or paused | Must be released after debt is paid |
Both are serious — but levies affect your cash flow immediately.
When a Payment Plan Makes Sense
You should consider an Installment Agreement if:
- You don’t qualify for an Offer in Compromise
- You have steady income
- You can afford monthly payments
- You want to stop levies without full payoff
How to Apply for an FTB Payment Plan After a Levy
Step 1: Get a Full Transcript
Review your:
- Outstanding balances
- Levy dates
- Past payment history
- Open notices
Step 2: Submit the Installment Agreement Request
You can:
- Apply online through the FTB portal (for balances under $25,000)
- Submit Form FTB 3567 (for larger balances or complex situations)
Include:
- Monthly income and expense details
- A proposed monthly payment
- A signed agreement to file and pay on time going forward
Step 3: Request a Levy Release (If Needed)
You or your CPA can request the FTB to release an existing levy once a payment plan is approved — especially if:
- The levy caused financial hardship
- You’ve submitted a good-faith request for resolution
This is also a prime opportunity to
reduce penalties while setting up a payment plan so you save money over the long term.
👉 How to Stop an FTB Bank Levy Before It Starts
Step 4: Stay Compliant
The FTB will cancel your Installment Agreement if you:
- Miss a payment
- Fail to file future returns
- Add new unpaid balances
Pros and Cons of Getting a Payment Plan After Levy
| Pros | Cons |
|---|---|
| Stops future levies | Must pay full balance + interest |
| Prevents wage garnishment | Missed payments = immediate enforcement |
| Buys time to resolve debt | No guarantee past levies are reversed |
| Easier than Offer in Compromise | Doesn’t reduce total amount owed |
How Boulanger CPA Helps Orange County Taxpayers
We help individuals and businesses across Irvine, Santa Ana, Anaheim, and Fullerton:
- Stop active FTB levies
- File Installment Agreement requests
- Request levy releases
- Negotiate monthly payment amounts
- Maintain compliance to avoid default
📞 Call
657-218-5700
🌐
www.orangecounty.cpa
Frequently Asked Questions
Can I get a payment plan after an FTB levy?
Yes. You may still qualify for a payment plan even after the California Franchise Tax Board has issued a levy, but you must act quickly.
Will a payment plan stop the levy?
In most cases, yes. Once a payment plan is approved and confirmed, the FTB will release active levies and stop future ones.
What information will the FTB need?
The FTB will typically require proof of income, expenses, and assets to determine an affordable monthly payment amount.
Can I negotiate the payment amount?
Yes. You can propose a payment amount based on your ability to pay, but the FTB must approve it.
Does the levy money get returned once I set up a plan?
Not usually. Funds already taken by the levy are applied to your tax debt, and only future collections will stop once the plan is active.
How can a CPA help after an FTB levy?
A CPA can negotiate the fastest possible levy release, set up a manageable payment plan, and ensure your rights are protected during the process.
📣 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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