If you’re in the habit of visiting our tax law blog, you may have already seen our recent article discussing the “Top 500 Delinquent Taxpayers”: a public, online list identifying the individuals who owe the top 500 largest outstanding tax debts to the state of California. The Franchise Tax Board (FTB), which collects and reviews state tax returns, is required by law to publish and periodically update the list, a provision of the California Revenue and Taxation Code under Section 19195. The question is, what are the consequences of inclusion? And how, short of continually refreshing the FTB website, do taxpayers even know whether they have been added? Our FTB tax audit lawyers have the answers.
How Will I Be Notified if the Franchise Tax Board Publishes My Information?
The bad news is that state law makes it mandatory for the Franchise Tax Board to publish information about the state’s largest tax debtors, meaning taxpayers should not expect the list to disappear anytime soon. To quote the language used in the statute, the FTB “shall make [publicly] available… at least twice each calendar year a list of the 500 largest tax delinquencies in excess of one hundred thousand dollars ($100,000)” that are owed to the state.
While the statute calls for a minimum of just two updates per year, in reality, the FTB updates the list on a monthly or weekly basis. In fact, the list has already been updated since our last on this subject was published, with updates noted just eight days apart: first on October 30, followed by updates on November 7.
The good news is that you will receive advance notification before your name is published, giving you an opportunity to respond – and potentially, prevent unwanted outcomes. The FTB must provide you with written notification of its intent to publish your information at least 30 days before posting your name or other data online.
If you believe that the FTB has made an error, or wish to discuss methods of resolving your account, you may contact the Franchise Tax Board using the information below:
- For issues involving personal income taxes, call (888) 426-8555
- For issues involving corporate income taxes, call (888) 426-8751
- For issues involving out-of-state taxpayers, call (916) 845-7874
Alternately, you may send written documentation to the following FTB mailing address:
Franchise Tax Board
P.O. Box 3065
Rancho Cordova CA 95741-3065
However, before transmitting any information or records to the FTB (or to other tax authorities), it is strongly advised that you discuss your situation with an experienced California tax attorney or CPA.
What Happens if You Are Named on California’s Top 500 Delinquent Taxpayers List?
There are several effects of being listed among the Top 500 Delinquent Taxpayers, and unfortunately for those impacted, none are positive for taxpayers. To begin with, there is the potential for embarrassment – to say nothing of the loss of privacy. As required by law, the FTB publishes each taxpayer’s first and last name, partial address, total amount owed, and dates pertaining to tax liens, among other information. Here is an example of what any FTB website visitor will be able to see about you, using the actual data available as of November 7, 2018:
- Alphabetically, the first taxpayers on the list are currently Nilufer Abbas and Sayed H. Abbas
- They reside in Sugar Land, Texas, zip code 77479
- They owe a total of $441,732.07
- There is a record of a lien dated August 24, 2017
Yet compromised privacy is not the only consequence. Of even greater concern are the impacts to one’s career. If your name is placed on the FTB’s list of delinquent taxpayers, there can be two devastating professional consequences:
- Any occupational licenses or professional licenses that you currently hold will be endangered. Either may be suspended in accordance with Section 494.5 of the California Business and Professions Code (BPC), depriving you of the qualifications and equipment needed to perform your job. Your driver’s license can also be suspended under the same regulations, limiting your mobility and making it more difficult to commute.
- Moreover, you will be unable to contract with any California government agencies – which, depending on your client base, could translate to a substantial loss of income. This is due to Section 10295.4 of the California Public Contract Code (PCC), which provides, “Notwithstanding any other law, a state agency shall not enter into any contract for the acquisition of goods or services with a contractor whose name appears on either list of the 500 largest tax delinquencies… Any contract entered into in violation of this subdivision is void and unenforceable.” This provision of the law applies to contracts “executed on or after July 1, 2012.”
Our FTB Tax Lawyers Can Help if You Owe Unpaid Taxes or Have Unfiled Returns in California
If you owe state back taxes, have unfiled California tax returns, failed to report all of your California source income, failed to maintain the required records, or need to resolve another FTB dispute involving unfiled state returns or delinquent tax debts, look to the Tax Law Office of David W. Klasing for trustworthy, on-point support anchored by more than 20 years of tax experience. We are a full-service California tax firm providing criminal tax defense, tax preparation services, and other services to help get you caught up while holding the damage to a minimum. For a reduced-rate consultation, call our tax offices at (800) 681-1295, or contact us online today.
Also, we’ve expanded our offices! In addition to our offices in Irvine and Los Angeles, the Tax Law Offices of David W. Klasing now have offices San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland and Sacramento.
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