What Happens If You Ignore Tax Notices in California?
Let’s be honest — tax notices are scary. It’s tempting to toss them in a drawer, ignore the deadlines, or tell yourself you’ll deal with it later.
But in California, ignoring tax notices from the IRS, Franchise Tax Board (FTB), or CDTFA can lead to serious consequences — including:
- Frozen bank accounts
- Wage garnishments
- Liens on your property or business
- Business suspension or license revocation
- Criminal charges in extreme cases
The longer you wait, the harder (and more expensive) it becomes to fix.
This post breaks down what actually happens when you ignore a tax notice — and what you should do instead.
Common Tax Notices (and What They Mean)
| Agency | Common Notices | What They Lead To |
|---|---|---|
| IRS | CP14, CP504, LT11, Letter 1058 | Levy of wages, bank accounts, Social Security |
| FTB | FTB 4905, FTB 4930, Demand Notices | Liens, suspended entities, bank levies, garnishments |
| CDTFA | Notice of Determination, Intent to Levy | Sales tax liens, asset seizure, criminal referral |
What Happens If You Ignore IRS Notices?
The IRS sends notices in escalating order:
- CP14 – You owe taxes
- CP504 – Intent to levy state refunds
- Letter 1058 / LT11 – Final Notice of Intent to Levy
If you don’t respond within 30 days of LT11, the IRS can:
- Garnish wages
- Levy your bank account
- File a federal tax lien
- Start collection actions without further warning
What Happens If You Ignore FTB Notices?
The FTB enforces California income tax, business tax, and LLC fees. If you ignore:
- FTB 4905/4930
– They will levy your bank account in as little as
10 days
- They can also
suspend your LLC or S-corp, preventing legal business operation
FTB notices often result in:
- Franchise tax assessments
- Refund offsets
- Bank account levies without court approval
- Vehicle or professional license suspensions
What Happens If You Ignore CDTFA Notices?
CDTFA handles sales and use tax, fuel tax, tobacco tax, and cannabis tax. Their notices often lead to:
- Estimated assessments (even if you didn’t file)
- Liens and levies without court proceedings
- Field audits and asset seizures
- Criminal prosecution in cases of fraud or tax evasion
If you don’t respond to a Notice of Determination, the tax becomes final in 30 days and collections begin immediately.
Compounding Consequences of Inaction
Ignoring tax notices creates a domino effect:
- Penalties and interest
stack quickly
- You lose appeal rights
- Collection actions begin
- You appear uncooperative
- Enforcement agents become more aggressive
- You limit your resolution options (e.g., Offer in Compromise may be denied)
What to Do Instead
If you received any tax notice, act immediately:
- Don’t panic — read it carefully
- Identify the agency (IRS, FTB, or CDTFA)
- Contact a tax resolution professional
- Respond before the deadline
- Negotiate resolution options (Installment Agreement, OIC, hardship)
- Document everything
Why Work With a California CPA
At Boulanger CPA, we:
- Respond to IRS, FTB, and CDTFA notices on your behalf
- Stop collections before they start
- File appeals, abatement requests, and settlements
- Prevent levies and resolve outstanding debt
📞 Call 657-218-5700 or Schedule a Consultation
Frequently Asked Questions
What happens if I ignore an IRS tax notice?
The IRS will eventually garnish wages, levy your bank account, or file a lien if you don’t respond to final notices like Letter 1058.
Can the FTB really freeze my bank account?
Yes. The FTB can issue a bank levy without court approval, often within 10 days of sending a demand notice.
Does CDTFA take legal action if I ignore them?
Yes. The CDTFA can file liens, levy accounts, or refer cases for criminal prosecution if you ignore audit or collection notices.
What if I didn’t receive the tax notice?
Agencies consider notices delivered if sent to your last known address. Not receiving it usually doesn’t excuse non-response.
Can a CPA respond to notices for me?
Yes. A CPA with power of attorney can contact the IRS, FTB, or CDTFA directly to stop collections and negotiate resolutions.
📣 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.
Marc The CPA's Tax Blog
