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FAQS

Frequently Asked Questions

They serve as a convenient resource, offering clarity and guidance, ultimately enhancing user experience and reducing the need for repetitive inquiries.

Do I have the right to dispute my tax debt?

Yes. You can challenge a notice or assessment by submitting a formal protest before the deadline. You may also appeal specific collection actions or request a review. Make sure to submit the required forms and any supporting documentation promptly.

What is the difference between a lien and a levy?

A lien is a legal claim against your real or personal property due to unpaid taxes. It doesn’t take anything from you immediately, but it can affect your ability to sell property. A levy, by contrast, is an active collection tool that allows the FTB to seize money or wages from your bank account.

Can I settle my tax debt for less than I owe?

Yes. The Franchise Tax Board offers an Offer in Compromise program if you qualify. You must prove you cannot pay the full amount, even over time. You must provide documents such as proof of income, recent tax returns, and a detailed financial hardship statement.

How long does a tax lien stay on my record in California?

A tax lien remains until the full amount of debt is paid. After payment, you can request an official FTB tax lien release. The lien will be expunged from public records after it is granted. Failing to resolve it may negatively affect your credit and ability to transfer or refinance property.

Can I stop a bank levy or wage garnishment once it starts?

Yes, but you must act quickly. You can request a review, claim financial hardship, or resolve the tax debt through payment or a payment plan. In some cases, submitting proper documentation—such as an economic hardship statement or proof of payment—may lead to releasing the levy or withholding order.

What happens if I ignore a notice from the Franchise Tax Board?

Ignoring an FTB notice may escalate collection actions, including liens, levies, and wage garnishment. Interest and penalties will continue to accrue, and you may lose the right to dispute the tax liability. Responding before the deadline gives you more resolution options and helps protect your assets.

What if I cannot afford to make any payment at all?

Even if you are experiencing severe financial hardship, Arizona requires that your offer include some dollar amount. Offers stating “zero” or leaving the payment field blank will not be considered. You must determine and propose the maximum amount you can reasonably afford. The state will evaluate your financial situation and decide whether accepting that reduced amount is appropriate under Arizona law.

Can I still make payments on a tax installment agreement while my offer is pending?

Yes, Arizona recommends that taxpayers continue making scheduled payments on any active installment agreement while the offer in compromise is under review. Making payments demonstrates good faith and ongoing compliance. If your offer is accepted, the remaining balance on the installment plan will be adjusted or forgiven based on the terms of the compromise. If your offer is denied, your plan will remain active.

Will Arizona remove a tax lien if my offer is accepted?

Once your offer is accepted and the full amount is paid, the Arizona Department of Revenue will release any tax lien related to the resolved tax period. The release typically occurs once all terms of the agreement have been satisfied. This resolution helps restore your financial standing by lifting claims against your property or bank accounts, allowing you to move forward without continued enforcement action.

What happens if my Arizona offer in compromise is denied?

If your offer is denied, Arizona will notify you by mail. Although there is no formal appeal process, you may reapply if your financial situation changes or if you can provide additional documentation. The full tax liability remains due during this time, and the department may resume collection activities, including penalties and interest. Consider alternative options like an installment agreement if a compromise is not approved.

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Start Your Free Case Review

Questions? We’re Ready to Assist!

Frequently Asked Questions

Require more information?

Don’t Wait Until the IRS Garnishes Your Paycheck.

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