California Tax Service Center

Past Due Liabilities

Past Due Liabilities

If you have past-due liabilities, the information below may help you with the collection process. You may also be interested in Payment Proposals and Offers in Compromise.

Board of Equalization

If you receive a Demand for Tax Payment, it means you have a tax or fee liability that is due and payable by the date indicated. For information on the collection process, see Tax Collection Procedures (Publication 54).

Employment Development Department

The EDD sends out Employer Account Statements (DE 2176) when employers owe past due amounts and/or do not submit quarterly/annual reports when due. The DE 2176 explains the reason for the statement and requests payment in full and/or the return(s). If you believe the DE 2176 is inaccurate, call EDD immediately at the telephone number on the statement. If you are unable to pay in full, please see the Information Sheet: Installment Agreement (DE 631P) for information on liquidating debts due over a period of time.

Employers who do not file and pay liabilities timely are subject to the filing of a State Tax Lien. For more information, please see Information Sheet: State Tax Lien (DE 631TL). Offers in Compromise allow qualified tax debtors to eliminate a payroll tax liability at less that full value. For information, please refer to Information Sheet: Offers in Compromise (DE 631C).

Franchise Tax Board

If you receive a notice from the Franchise Tax Board requesting a return or payment for taxes, contact FTB immediately. Even if you can't pay your taxes in full, file your return to avoid further penalties. The FTB may be able to work out a payment arrangement plan with you.

If you don't understand the notice you received, see Notice Codes (Return Information Notice or Notice of Tax Change) on the FTB website.

Internal Revenue Service

If you do not pay in full when you file, you will receive a bill. This bill begins the collection process.

The first bill you receive will explain the reason for your balance due and demand payment in full. It will include the tax due plus penalties and interest that are added to your unpaid balance from the date your taxes were due.

If you believe the bill is inaccurate, please write the IRS office that sent you the bill or visit your nearest office.

For more information about the collection process, see Topic 200 - Collection.


Liens, Levies, and Offsets

Liens, levies and offsets are three ways to collect unpaid taxes. A lien provides public notice to your creditors that someone has a claim against your property. When the debt is paid, the lien is released. A levy gives the creditor the authority to actually take and sell your property to satisfy the debt. An offset occurs when the taxes that you owe are deducted (offset) from a refund due by another government agency.

Board of Equalization

A lien is a legal claim to your property as security for your tax or fee debt. We will mail you a preliminary notice at least 30 days before filing a lien with the county recorder.

If you do not pay your liabilities or make arrangements to settle your tax or fee debt, BOE may levy (seize) any type of real or personal property that you own or have an interest in.

The BOE will usually only levy property after sending you a Demand for Payment letter and you have neglected or refused to pay the tax or fee. For more information on liens and levies read Tax Collection Procedures (Publication 54).

Employment Development Department

The EDD may record a state tax lien against employers who do not file required returns and pay liabilities timely. For more information, please see Information Sheet: State Tax Lien (DE631TL).

Franchise Tax Board

FTB may record against taxpayers when their tax debts are delinquent. FTB notifies taxpayers 30 days prior to recording the lien. If the taxpayer does not respond, a lien is recorded with the county recorder. If you have a lien or levy that was issued by FTB, call (800) 852-5711 to find out more about it or refer to Financial Hardship to find out about your options.

Internal Revenue Service

The IRS discusses liens and levies on their Website in the Topic 201 - The Collection Process.