How to Stop an FTB Bank Levy Before It Starts
Introduction: If You Wait, the FTB Won’t
When you owe California back taxes, the Franchise Tax Board (FTB) doesn’t hesitate to collect.
And one of their most disruptive tools is the bank levy — a legal action that allows the FTB to freeze and seize funds directly from your bank account without warning.
But here’s the good news:
You can stop an FTB bank levy — if you act early enough.
In this guide, we’ll walk you through exactly how FTB levies work, what warning signs to watch for, and what Orange County taxpayers can do to prevent the FTB from emptying their accounts.
π£ What Is a Bank Levy?
A bank levy is when the FTB sends a legal order to your financial institution requiring them to:
- Freeze your account
- Send available funds to the FTB
- Do it without court involvement
Unlike a lien (which is a claim), a levy actually takes your money.
π¨ What Triggers an FTB Bank Levy?
You may be at risk for a bank levy if:
- You have unpaid California taxes
- You ignored FTB notices
- You missed a Demand for Payment
- You failed to respond to a Notice of Proposed Assessment (NPA)
- You defaulted on a payment plan or prior arrangement
π What Happens If You Ignore FTB Notices?
π§Ύ Common Warning Signs You’re About to Be Levied
- Demand for Tax Return (DFTR)
- Notice of Proposed Assessment
- Final Notice Before Levy
- FTB collection calls or wage garnishment notices
- Prior levies or liens filed on your account
π FTB Collections Process: A Guide for California Taxpayers
π How Fast Can It Happen?
The FTB does not require a court order to levy your bank account. Once your account is flagged for collection:
- A Final Notice Before Levy is issued
- You may have as little as 30 days (or less)
- Once the bank receives the levy, the funds may be frozen immediately
π‘ Can I Stop an FTB Bank Levy Once It Starts?
Yes — but it becomes harder. Your best chance is to prevent it entirely by taking action during the notice period.
β How to Stop a Bank Levy Before It Starts
β 1. Open and Read Every FTB Notice
Even if it’s scary or confusing, you must read what the FTB sends you.
If you don’t understand it, call a CPA or tax professional — not the FTB directly.
π Received a Notice from the FTB? Here’s What It Means
β 2. File Any Missing Tax Returns
Non-filers are high-risk levy targets. The FTB may file a Substitute Return on your behalf (with inflated income and no deductions) and then pursue collections.
π How to Get Back Into Compliance with the FTB
β 3. Contact a CPA to Request a Hold on Collections
If your levy hasn’t hit yet, a tax professional can often:
- Contact the FTB on your behalf
- Request a temporary hold
- Submit financial disclosures
- Buy you time to set up a resolution
β 4. Request a Payment Plan (Installment Agreement)
Payment plans can stop the FTB from moving forward with a bank levy — especially if submitted before the levy date.
π FTB Offer in Compromise vs Installment Agreement – Which Is Better?
β 5. Qualify for a Hardship Deferral
If paying anything would create financial hardship, you may be able to request temporary suspension of collections.
π How to Qualify for a California FTB Hardship Deferral
β 6. Submit an Offer in Compromise (OIC)
If you truly can’t pay and never will, you may qualify to settle your debt. If an Offer is pending, the FTB may delay enforcement until it’s reviewed.
π FTB Offer in Compromise Success Rates & Mistakes to Avoid
π What NOT to Do if You’re Facing an FTB Levy
β Don’t Move Your Money Around
The FTB can trace financial activity and issue multiple levies to different institutions.
β Don’t Call the FTB Without Representation
What you say may limit your options later — or trigger additional enforcement.
β Don’t Assume It Will Go Away
The FTB will not “give up.” Even small balances can trigger bank levies and liens.
π§ How Boulanger CPA Helps Orange County Taxpayers
We help clients in Santa Ana, Irvine, Anaheim, Tustin, and throughout Orange County:
- Identify levy risk based on notices or transcripts
- Contact the FTB to stop pending levies
- Set up compliant Installment Agreements or Offers
- File missing returns
- Protect wages and bank accounts from enforcement
π Call
657-218-5700
π
www.orangecounty.cpa
Frequently Asked Questions
How much notice does the FTB give before a bank levy?
You may receive a Final Notice Before Levy — but not always. Action can happen quickly after missed payments.
Can I get my money back once the FTB takes it?
In some cases, yes — if the levy caused financial hardship or was in error. But success is higher if you act before the funds are transferred.
Whatβs the fastest way to stop an FTB bank levy?
File missing returns, request a payment plan or hardship hold, and have a tax professional contact the FTB immediately.
Can I move money to a different bank account to avoid a levy?
No — this can cause legal problems and may not work. The FTB can issue multiple levies at once.
ο»Ώπ£ About the Author
Marc Boulanger, CPA is the founder of Boulanger CPA and Consulting PC, based in Orange County, California.
With over a decade of experience helping individuals and businesses resolve serious IRS and State tax issues, Marc specializes in tax resolution strategies including Offers in Compromise, wage garnishment relief, and back tax compliance.
He is licensed as a Certified Public Accountant in both California and Oklahoma, and has a proven track record of helping clients settle complex tax debts and regain financial stability.
π Learn more at www.orangecounty.cpa or call (657) 218-5700.
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