How Often Can the California Tax Board Levy Your Bank Account

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How Often Can the California Tax Board Levy Your Bank Account?

The California Tax Board, also known as the Franchise Tax Board (FTB), has the authority to collect unpaid taxes from individuals and businesses. One of the methods they use to collect these debts is through bank levies. A bank levy allows the FTB to seize the funds in your bank account to satisfy your outstanding tax liabilities. However, there are rules and limitations regarding how often the FTB can levy your bank account.

In California, the FTB can levy your bank account multiple times if you have unpaid tax liabilities. There is no specific limit on the number of times they can levy your account. However, the FTB must follow certain procedures and guidelines before initiating a bank levy.

When the FTB decides to levy your bank account, they must first send you a Notice of Levy. This notice will inform you of their intent to levy your bank account and give you an opportunity to resolve the tax debt before the levy is implemented. You have 30 days from the date of the notice to either pay the debt in full or make arrangements for a payment plan.

If you fail to respond or resolve the tax debt within the 30-day period, the FTB can proceed with the bank levy. They will send a levy notice to your bank, instructing them to freeze your account and send the funds to the FTB to satisfy the outstanding tax debt. The bank is required to hold the funds for 10 days before sending them to the FTB.

It is important to note that the FTB cannot levy your bank account if you have an active installment agreement or if you are in the process of negotiating a settlement with them. However, if you default on your payment plan or fail to comply with the terms of the settlement, the FTB can resume levying your bank account.

FAQs:

1. Can the California Tax Board levy my bank account without prior notice?
No, the FTB must send you a Notice of Levy before initiating a bank levy.

2. How long do I have to resolve the tax debt after receiving a Notice of Levy?
You have 30 days to either pay the debt in full or make arrangements for a payment plan.

3. Can the FTB levy my bank account multiple times?
Yes, there is no specific limit on the number of times they can levy your account if you have unpaid tax liabilities.

4. Can the FTB levy my bank account if I have an active installment agreement?
No, they cannot levy your bank account if you have an active installment agreement.

5. What happens if I default on my payment plan?
If you default on your payment plan, the FTB can resume levying your bank account.

6. Can the FTB levy my bank account if I am negotiating a settlement?
No, they cannot levy your bank account if you are in the process of negotiating a settlement.

7. Does the bank levy freeze all my funds?
The bank levy will freeze the funds in the account at the time of the levy. Any deposits made after the levy will not be affected.

8. How long does the bank hold the funds before sending them to the FTB?
The bank is required to hold the funds for 10 days before sending them to the FTB.
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