When an FTB letter arrives, your next steps should be driven by the exact notice type and the deadline on that notice. California law gives you clear protest and appeal windows, interest rules that you can use to reduce carrying cost, and defined collection procedures if a balance is due. Start by identifying the notice, then act before the stated date.
Identify the Letter and its Deadline, Then Stabilize the File
Start by reading the title line and the “Respond by” or “Protest by” date. Common FTB communications include a Request or Demand for Tax Return, a Request for Information, a Notice of Tax Return Change, a Notice of Proposed Assessment, a Notice of Action, and various collection notices, such as an Intent to Levy or a Notice of State Tax Lien. Each has a different purpose and deadline. If you want a representative to speak for you, submit a California power of attorney through FTB’s e-POA system or the current FTB 3520 series form so the auditor or collector can work directly with your representative. If the letter requests records, gather the exact items listed and keep the originals safe. If you disagree with a proposed change, begin assembling the schedules and source documents that show what really happened and how the math ties to your return.
Know What the Specific FTB Letter is Really Asking You to Do
Request or Demand for Tax Return
File the missing return, or prove it was filed, by the date shown. If California believes you had a filing requirement, ignoring a demand can lead to a recommended assessment based on estimates.
Request for Information or Notice of Tax Change
FTB is matching third-party data to your return and needs support. Provide the documents listed, organized and paginated, and include a short cover note that connects each item to a line on your return. If you agree with a slight change to limit interest, pay it to limit interest, then keep working with FTB to close the file.
Notice of Proposed Assessment (NPA)
This is the key audit letter. You generally have 60 days from the notice date to file a written protest. Interest continues to run while you protest. If you remit all or part of the proposed amount within 15 days of the NPA date, interest on the amount you paid stops as of the notice date. Payments made later stop interest as of the date received. Use the protest to correct math, supply missing documents, and explain the controlling California law.
Notice of Action (NOA)
This is FTB’s decision after a protest or a refund claim. If you still disagree, you generally have 30 days from the NOA date to appeal to the Office of Tax Appeals. If the matter involves a denied refund claim, the appeal window is typically 90 days.
Collections Notices
If a balance is due and payable, FTB can issue an Intent to Levy, wage garnishment instructions known as an Earnings Withholding Order for Taxes, or record a Notice of State Tax Lien. These actions are notice-driven and time-sensitive. Contact FTB before the stated date to enter a payment plan, make a targeted payment that reduces interest, or request a review if you believe the action is improper.
Respond Like an Auditor Will Verify it: Rebuild the Math and Provide Examiner-Grade Proof
California reviewers respond to clear records that match their testing of files. Rebuild the schedules an examiner will prepare anyway and tie them to source documents:
Income and Gains
Bank, brokerage, merchant-processor statements, closing statements, basis records, and reconciliations that connect to Schedule CA or business schedules.
Deductions and Credits
Receipts, logs, and contemporaneous acknowledgments for charitable gifts. For businesses: invoices, proof of ordinary and necessary expenses, mileage logs, home-office logs when claimed, and depreciation support.
Residency and Sourcing
Travel calendars, domicile indicators such as homes, licenses, family and business ties, and work-location or customer-location proof for market-based sourcing.
Pass-Through Items
Partnership or S corporation workpapers that support basis, at-risk and passive limits, apportionment, and credits flowing to owners.
If your federal taxable income changes later, California state generally requires you to report the final federal change within six months when it affects your California tax. Timely reporting aligns the state clock with the federal result and opens a defined state window to address only those changed items.
Control Interest and Penalties While You Keep Rights Intact
Interest in California accrues from the original return due date and compounds daily. If you know a portion of the balance will remain due, make a targeted remittance while you protest or appeal to stop interest on that amount. California offers a One-Time Penalty Abatement for specific timeliness penalties if you qualify, and separate reasonable-cause relief where your documents show you acted with ordinary care. Interest abatement is narrow and generally requires a particular showing, such as unreasonable error or delay by FTB personnel in performing specific duties.
If you cannot pay in full, many individual taxpayers can qualify for an installment agreement once all required returns are filed. Keep current-year filings and estimates clean, as new delinquencies can default a plan. If your dispute is about what is actually owed rather than the ability to pay, protested or appealed cases may be eligible for an FTB settlement based on the hazards of litigation. Offers in Compromise are reserved for cases where complete collection is not realistically possible.
What Happens if You Do Nothing, and How to Get Back on Track
If you miss a protest or appeal deadline, an assessment can become final and be sent to collections. FTB can garnish wages, levy bank accounts, and record state tax liens that attach to California property interests and show up in credit and title searches. You can still pay and file a refund claim within the applicable claim period, but it is better to preserve your protest or appeal window. If a levy or lien was filed in error, you can ask FTB to correct it and, in the right facts, to reimburse certain bank charges related to an erroneous levy. If ordinary channels are not resolving a clear process issue, the Taxpayers’ Rights Advocate can help review the matter.
Contact the Tax Law Offices of David W. Klasing if You Received an FTB Letter
From the first call, our dual-licensed attorneys and CPAs at the Tax Law Offices of David W. Klasing will identify your notice, calendar the exact statutory deadline, and select the correct track: a focused protest at FTB, an appeal to the Office of Tax Appeals, or a collection resolution that stops enforcement while we fix the underlying issue. We file your California power of attorney, take over communications, and rebuild examiner-grade schedules that tie your books, bank, broker, and wage data back to your filed return, so your file tells a single, credible story.
If your letter relates to a federal change, we handle California’s six-month reporting rule, align the state computations with the IRS report, and use targeted remittances to stop interest on the amounts you place on account. If your letter is a levy or lien warning, we request a review, demonstrate compliance, and pursue alternatives, such as installment agreements, consistent with FTB policy. When settlement is warranted, we position your file for an FTB settlement based on litigation hazards, which is distinct from an ability-to-pay Offer in Compromise.
To get your timeline under control and your record in shape, call 800-681-1295 or book a confidential, reduced-rate initial consultation online HERE with the Tax Law Offices of David W. Klasing.
