What Happens If You Ignore FTB Notices?

Introduction: You Might Be Ignoring More Than Just a Letter

If you’ve received a notice from the California Franchise Tax Board (FTB) and shoved it in a drawer, you’re not alone — but you're putting your income, credit, and property at risk.

Unlike the IRS, the FTB is faster and more aggressive when it comes to enforcing collections. What starts as a “friendly reminder” can quickly become a bank levy, wage garnishment, or tax lien — often within weeks.

This post explains what happens if you ignore FTB notices, learn the steps the FTB takes after sending notices, and how Orange County taxpayers can take back control before enforcement begins.

📬 Types of FTB Notices and What They Mean

Before you act, you need to understand the notice and respond effectively. Each FTB letter has legal weight and sets a timeline in motion.

📨 1. Notice of Tax Due

Sent when you filed a return with a balance or failed to pay a previous year’s liability.

• Includes your balance due, due date, and penalty/interest accrual
• If ignored, it leads to a Demand for Payment

🧾 2. Demand for Tax Return

Issued if the FTB has record of income (e.g., W-2s or 1099s) but no corresponding return on file.

• If you ignore this, the FTB may issue a Notice of Proposed Assessment and file a Substitute Return for you.

👉 Respond to FTB notices before enforcement begins to avoid substitute filings and excessive tax bills.

📉 3. Notice of Proposed Assessment (NPA)

A proposed tax bill based on income the FTB believes you failed to report.

• You have 60 days to respond or protest
• If you don’t, the balance becomes legally enforceable

🔔 4. Final Notice Before Levy

A last warning before the FTB seizes your bank accounts or wages.

• Ignoring this can lead to immediate garnishments or levies
• The FTB does not need a court order

👉 What to Do If You Receive a Levy from the FTB

🚨 What Happens If You Ignore These Notices?

💣 1. Substitute Return Filed

The FTB can file a return on your behalf — often without any deductions, credits, or exemptions.

• Results in a higher tax bill than necessary
• Can trigger additional enforcement notices

💸 2. Wage Garnishment

The FTB can garnish your wages using a fixed exemption formula (not a percentage like the IRS).

• You could lose $300 to $1,200+ per paycheck depending on income
• It continues until the debt is paid or resolved

👉 Wage Garnishment in California: Know Your Rights

🏦 3. Bank Account Levy

Your checking or savings account can be frozen and emptied — without court involvement.

• You may not know it’s coming until your account is locked
• Funds are seized and applied to your tax debt

🏠 4. Tax Lien Filing

The FTB can file a lien on balances as low as $100 — seriously affecting your credit and ability to borrow.

• Liens are public records
• Reduce penalties after ignoring notices by acting before this stage

👉 How to Remove an FTB Tax Lien in California

⚠️ 5. Suspension of Licenses

For certain tax balances, the FTB may recommend suspending your:

• Driver’s license
• Professional or occupational license (e.g., contractors, CPAs, attorneys)

📉 6. Penalties and Interest Accrue Daily

Ignoring a balance means you’re also ignoring the 5% monthly filing penalty, 0.5% monthly payment penalty, and daily compounded interest.

👉 California Back Tax Penalties and Interest Explained

❗ 7. You Lose Appeal Rights

Some notices (like NPAs) come with strict deadlines. If you miss them:

• You lose your right to protest
• Compare enforcement powers of California and federal tax agencies — the FTB does not need court approval to take action
• Your only remedy is payment or settlement

✅ What You SHOULD Do If You’ve Ignored FTB Notices

✅ 1. Get a Transcript of Your FTB Account

Request your full FTB transcript to see what they’ve assessed and when. Your CPA can do this on your behalf with a Power of Attorney.

✅ 2. Respond to the Most Recent Notice

Even if previous notices were ignored, it’s not too late.

• Focus on the most recent active notice
• Send a written response or file the correct return
• Don’t call the FTB without guidance — responses matter

✅ 3. File Any Missing Returns

Avoid further assessments or substitute filings by submitting real returns.

👉 How to Get Back Into Compliance with the FTB

✅ 4. Request a Payment Plan or Relief

You may be able to stop collections with:

• An Installment Agreement
• A Hardship Deferral
• An Offer in Compromise if you qualify

👉 Top Tax Relief Options for California Taxpayers

✅ 5. Request Penalty Abatement

If you ignored notices due to hardship or misinformation, you may qualify for penalty removal.

👉 Can You Get California Tax Penalties Removed?

🧭 How Boulanger CPA Helps Orange County Taxpayers

We help individuals and small business owners in Irvine, Santa Ana, Anaheim, Tustin, and across Orange County:

• Interpret and respond to FTB notices
• File missing returns or reverse substitute assessments
• Stop levies, liens, and garnishments
• Negotiate affordable resolution plans
• File for penalty abatement or hardship relief

📞 Call 657-218-5700
🌐 www.orangecounty.cpa

📣 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.