IRS Tax Relief vs FTB Relief – Key Differences
Introduction: Federal and State Tax Relief Aren't the Same
If you owe back taxes, you might be eligible for tax relief — but not all tax relief programs are created equal.
In fact, IRS relief programs and California Franchise Tax Board (FTB) relief options are very different in how they operate, how generous they are, and how aggressively they collect unpaid debt.
If you're a taxpayer in Orange County, understanding these differences can mean the difference between resolving your tax debt successfully — or getting caught in endless collections.
This guide walks you through key differences between IRS tax relief and FTB tax relief, so you can choose the right strategy.
π Quick Overview: IRS vs FTB Tax Relief
| IRS | FTB | |
|---|---|---|
| Primary Programs | Offer in Compromise, Installment Agreement, CNC Status | Offer in Compromise, Installment Agreement, Hardship Deferral |
| Collection Style | Formal, procedural | Fast, automated, aggressive |
| Appeal Rights | Strong, multiple appeals | Limited, faster timelines |
| Relief Eligibility | More hardship-sensitive | Harder, more evidence required |
| Notice Process | Slow, multi-layered | Shorter, fewer warnings |
| Lien Threshold | ~$10,000+ | $100+ |
π§ 1. How They Collect Debt
IRS Collection Process:
- Multiple notices
- 30-day appeal windows
- Final Notice before levy or lien
- Time to negotiate before enforcement
FTB Collection Process:
- Few notices (sometimes only 2–3)
- Faster levy/garnishment timelines
- Lower threshold to file liens
- Aggressive use of automated bank levies and wage garnishments
π FTB Collections Process: A Guide for California Taxpayers
π§ 2. Offers in Compromise (OIC) Programs
IRS Offer in Compromise:
- Federal program
- Success rates vary (typically 30%–40% nationally)
- Strong consideration for hardship, age, income potential
β
Payment plans for accepted Offers
β
5-year compliance requirement after approval
FTB Offer in Compromise:
- State program for California taxes
- Approval rates for individuals: ~25%–27%
- More aggressive review of assets and future income
β
Must show inability to pay now or in the future
β
California considers home equity heavily
π FTB Offer in Compromise Success Rates & Mistakes to Avoid
π§ 3. Installment Agreements
IRS Installment Agreement:
- Wide variety of plans (short-term, long-term, partial pay)
- Can apply online for balances under $50,000
- Reasonable expense allowances
FTB Installment Agreement:
- Streamlined for balances under $25,000
- Shorter payment terms (max 60 months unless hardship)
- More aggressive monitoring for default
π§ 4. Hardship Programs
IRS Hardship (Currently Not Collectible Status):
- Formal designation that pauses collections
- Annual review required
- Protects wages, bank accounts during status
FTB Hardship Deferral:
- Available but harder to qualify
- Often temporary (shorter-term pauses)
- May still accrue penalties and interest
π How to Qualify for a California FTB Hardship Deferral
π§ 5. Lien Filing Policies
IRS Tax Liens:
- Typically filed when debt exceeds $10,000
- Opportunity for lien withdrawal if conditions are met
FTB Tax Liens:
- Can file liens on balances as low as $100
- No pre-lien appeal rights
- Harder to negotiate removal without full payment or settlement
π How to Remove an FTB Tax Lien in California
π Which Relief Option Is Better?
| Scenario | IRS Relief | FTB Relief |
|---|---|---|
| Severe Hardship | IRS more forgiving | FTB stricter |
| Large Penalties/Interest | IRS allows penalty abatement | FTB allows limited abatement |
| Quick Collection Actions | IRS slower | FTB faster |
| Lower Balance (<$10K) | IRS lien unlikely | FTB lien likely |
π‘οΈ Why Many Taxpayers Must Resolve Both IRS and FTB Debt
It’s common for Orange County taxpayers to owe both:
- IRS (federal taxes)
- FTB (state taxes)
Key points:
- Each agency acts independently
- You must negotiate separate settlements or payment plans
- Protecting your wages and bank accounts means addressing both sides strategically
π FTB Levy vs IRS Levy: What California Taxpayers Need to Know
π§ How Boulanger CPA Helps Orange County Taxpayers
We help individuals and businesses in Santa Ana, Irvine, Anaheim, Fullerton, and surrounding areas:
- Resolve IRS and FTB debt simultaneously
- Prepare Offers in Compromise
- Set up Installment Agreements
- Apply for penalty relief and hardship status
- Stop levies, garnishments, and liens
π Call
657-218-5700
π
www.orangecounty.cpa
Frequently Asked Questions
Is it harder to get tax relief from the FTB than the IRS?
Yes. The FTB is typically stricter than the IRS when it comes to Offers in Compromise and other relief programs. Most FTB settlements are only approved in cases of extreme hardship or business closure.
Can I get both IRS and FTB relief at the same time?
Yes. You must apply separately with each agency, using their unique forms and processes. A CPA can help you prepare both applications in a coordinated way that maximizes approval chances.
Do the IRS and FTB use the same financial standards?
No. The IRS uses Collection Financial Standards to evaluate expenses, while the FTB may apply more conservative thresholds. It’s important to tailor each application to its respective agency's criteria.
Which agency offers more options for resolving tax debt?
The IRS offers a broader range of resolution programs—including first-time penalty abatement, currently not collectible status, and partial pay installment agreements. The FTB offers fewer options and is more rigid in enforcement.
Should I hire a CPA if I owe both IRS and FTB?
Absolutely. A CPA can help you prioritize which debt to resolve first, prepare accurate financial statements, and negotiate with both agencies to find the best overall strategy for resolution.
ο»Ώπ£ 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.
π Learn more at www.orangecounty.cpa or call (657) 218-5700.
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