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 get 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.
👉 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
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
👉 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
👉 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
Will a payment plan stop an active FTB bank levy?
Possibly. If the levy has already been sent to your bank, funds may still be seized unless you act quickly. A payment plan can sometimes be negotiated to release the levy, but timing is critical.
Can I set up a payment plan before the levy hits?
Yes. The best way to avoid a levy is to enter into a payment agreement before the FTB initiates enforcement. Early action gives you more control and increases the chances of avoiding account seizures.
How much does the FTB require for monthly payments?
Monthly payment amounts are based on your balance and ability to pay. The FTB typically wants the full debt repaid within 3 to 5 years. Documentation may be required for larger or long-term plans.
Can a CPA negotiate better terms with the FTB?
Absolutely. A CPA can request a collection hold, propose a realistic payment plan, and help you avoid overpaying based on overstated income or asset assumptions. Professional representation improves your chances of success.
What if I can’t afford the FTB’s proposed payment amount?
You may qualify for hardship status, a reduced payment plan, or an Offer in Compromise if you meet certain criteria. A CPA can help present your case and advocate for a manageable resolution.
📣 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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