How do I resolve a wage garnishment or bank levy that was initiated by the California FTB?

To resolve a California Franchise Tax Board (FTB) wage garnishment or bank levy, you must contact the FTB immediately to either pay the debt in full or negotiate an alternative payment arrangement. Acting quickly is critical, especially to prevent funds from being seized from your bank account. Here are the steps to resolve the issue: Step 1: Contact the FTB Immediately Call the FTB's collection department at (800) 689-4776. Have your FTB notice, Social Security number, and any relevant tax documents ready. Inform the agent you have received an Order to Withhold (the legal term for a garnishment or levy) and wish to resolve it. For a bank levy, you typically have only 10 business days from when the bank freezes your account to act before the funds are sent to the FTB. Step 2: Understand the Debt and Your Options Ask the FTB agent to explain the total amount you owe, including which tax years, penalties, and interest are involved. The primary options for resolving the debt are paying in full, entering an Installment Agreement, or demonstrating an economic hardship. Step 3: Request an Installment Agreement If you cannot pay in full, request an Installment Agreement. Under California Revenue and Taxation Code Section 19254, you can make monthly payments. You will likely need to provide financial information to determine a monthly payment amount the FTB will accept. Step 4: File Any Missing Tax Returns The FTB will not typically grant a payment plan if you have unfiled tax returns. Ensure all past-due state tax returns are filed before or during your negotiations. Step 5: Obtain a Levy Release Once you reach an agreement, the FTB can issue a levy release to your employer or bank, as authorized by R&TC Section 21015.5. Confirm with the agent that the release will be sent and follow up with your bank or employer to ensure they received it. Important details and nuances: A bank levy freezes the funds in your account on a specific day. A wage garnishment (or Earnings Withholding Order) is continuous, taking a percentage of each paycheck until the debt is paid. If the levy would cause an extreme financial hardship, you may be able to get it modified or released. Warnings and limitations: Ignoring FTB notices will lead to further collection actions. An Installment Agreement does not stop interest from accruing on your unpaid balance. If you default on your payment plan, the FTB can immediately resume garnishments and levies without further notice. This is general information and does not constitute legal advice. For complex situations, such as a large tax debt or a dispute over the amount owed, you should consult with a qualified California attorney.