What the FTB Can and Can’t Legally Seize

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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. 💣 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. 🚨 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 👉 What Happens If You Ignore FTB Notices? 🧾 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 👉 FTB Collections Process: A Guide for California Taxpayers 📍 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 💡 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. ✅ How to Stop a Bank Levy Before It Starts ✅ 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. 👉 Received a Notice from the FTB? Here’s What It Means ✅ 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. 👉 How to Get Back Into Compliance with the FTB ✅ 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 ✅ 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. 👉 FTB Offer in Compromise vs Installment Agreement – Which Is Better? ✅ 5. Qualify for a Hardship Deferral If paying anything would create financial hardship, you may be able to request temporary suspension of collections . 👉 How to Qualify for a California FTB Hardship Deferral ✅ 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. 👉 FTB Offer in Compromise Success Rates & Mistakes to Avoid 🛑 What NOT to Do if You’re Facing an FTB Levy ❌ Don’t Move Your Money Around The FTB can trace financial activity and issue multiple levies to different institutions. ❌ Don’t Call the FTB Without Representation What you say may limit your options later — or trigger additional enforcement. ❌ Don’t Assume It Will Go Away The FTB will not “give up.” Even small balances can trigger bank levies and liens. 🧭 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 📞 Call 657-218-5700 🌐 www.orangecounty.cpa

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