When it comes to resolving an outstanding balance due with the CA Board of Equalization (BOE), the taxpayer has to be proactive. Proactive means that the taxpayer must respond in a timely manner to the notices they receive from the BOE to try to resolve their account. If the taxpayer does not deal with the outstanding balance due within a reasonable time, the BOE can and will take enforced collection action.
To prevent any enforced collection action, a taxpayer can pay the account in full (preferably before the account goes into collections). If this is a viable option for the taxpayer, the taxpayer can full pay the account by using one or more of the following payment methods.
Board of Equalization
PO Box 942879
Sacramento CA 94279-7072
If the taxpayer cannot afford to pay the outstanding balance due, the taxpayer can request a payment plan or an offer in compromise. Before the BOE, will entertain a payment plan or an offer in compromise, they BOE will ask the taxpayer to sell their assets and/or borrow against them to pay the balance due in full or in part. If the taxpayer does not have the ability to sell or borrow against his assets, the BOE may consider a payment plan that pays the balance due within 6 to 12 months. The taxpayer can request a payment plan on-line, and will have to log in with a User ID or Express Login at https://efile.boe.ca.gov/boe/boe_login.jsp. Note that in order for the taxpayer to apply for a payment plan online, the taxpayer must be in filing compliance (all tax returns must be filed) and their sales permit or license has not been revoked. The taxpayer must agree to a direct debit installment agreement and can choose to make payments, weekly, biweekly, or monthly.
A short-term installment agreement, may not be an option for many taxpayers. If a taxpayer cannot afford to full pay the balance due within 6 to 12 months, the taxpayer will have to provide their financial information to determine their ability to pay over an extended period of time. The problem however, is that the BOE Collection Representatives have discretion on whether or not to accept a payment arrangement. If the installment agreement is accepted, it will be subject to a one year review to see if the taxpayer’s ability to pay has changed. If the installment agreement is not accepted, the BOE can use the financial information provided by the taxpayer to pursue enforced collection action.
If a taxpayer has an outstanding balance due with the BOE that has not been paid in full or resolved via an installment agreement or an offer in compromise, the case will end up with the BOE Collections Division. The Collections Division sole purpose is to collect on the outstanding balances due. At this point, the BOE’s position is that the taxpayer has not been cooperating with the BOE and the agency has no other choice but to move forward with collection action.
Usually, one of the first things the BOE will do is file a tax lien for the outstanding amount due. Note that a tax lien is not a seizure, but is filed with the County Recorder’s Office to protect the government’s interest. A tax lien attaches to all real property. It is public record and will negatively impact the taxpayer’s credit rating. The lien generally comes into play when a taxpayer is trying to sells assets or borrow against them. However, before the BOE will file a tax lien, they must give the taxpayer proper notice. This means that the BOE will issue a notice 30-days before a lien is filed to inform the taxpayer that a lien may be filed, and what the taxpayer can do to prevent a lien filing. Usually, the option presented to taxpayers is to full pay the balance due by the due date on the notice. Note a tax lien may be filed, even if a taxpayer has an installment agreement.
To get a taxpayer’s attention, the BOE will issue multiple levies for the outstanding amount due. A levy is a seizure, a taking of one’s personal and/or real property. Once demand for payment has been made, and the taxpayer has not made the payment, the BOE can levy a taxpayer’s wages, bank accounts, dividends, accounts receivables, and, cash value of insurance policy, etc.
As you can see, the BOE has an arsenal of enforced collection methods at their disposal and it can be overwhelming for a taxpayer. However, a taxpayer will be given several opportunities to resolve their account prior to any enforced collection action. If the BOE has started to enforce collections, a taxpayer can still reach a resolution with the BOE, but it will be more difficult. The key to resolution with the BOE, is to be proactive. Therefore, it is highly recommended for taxpayers to seek counsel, before the case gets out of control.