California Active Collections Timeline Checklist

California Active Collections Timeline Checklist

California state tax enforcement occurs when the California Department of Tax and Fee

Administration or Franchise Tax Board takes active collection steps to recover unpaid taxes, penalties, or interest from a taxpayer. This typically happens after notices have been sent and payment deadlines have passed without response or payment.

Enforcement actions can include wage garnishment, bank levies, liens on real property, or other collection methods permitted under California law. Understanding what enforcement means and how it progresses is important because each stage offers different opportunities to address the issue before collection actions become more restrictive.

Ignoring enforcement notices or failing to respond can result in more aggressive collection methods, damage to property interests, and additional costs. Taxpayers face a serious stage in the collection process when enforcement begins, but options remain available to those who take action promptly because it is not the final step.

What This Issue Means

California state tax enforcement means the tax agency has determined that a tax debt is owed and is now using legal collection tools to recover it. This differs from earlier stages, such as a notice of proposed assessment or a demand for payment.

Why the State Issues Enforcement Actions

The state’s goal is to collect the money owed to fund state services. Enforcement is a standard administrative procedure authorized by statute, and the California Revenue and Taxation Code grants both agencies authority to pursue collection through various mechanisms when voluntary payment does not occur.

What Happens If Enforcement Is Ignored

If an enforcement action is ignored or no response is made, the state typically continues with the enforcement method already initiated. For example, FTB wage garnishment may continue until the tax debt is paid or resolved through another means.

Bank levies can be issued repeatedly without specific legal limits until the debt is satisfied, and the FTB and CDTFA can levy bank accounts as often as necessary to collect unpaid taxes, interest, penalties, and fees. Property liens remain in place and prevent the sale or refinancing of real property until the tax debt and costs are paid, and the longer the debt remains unresolved, the more it may cost in additional penalties, interest, and collection expenses.

What This Does Not Mean

State enforcement does not mean the taxpayer has lost all rights or options. It does not automatically result in criminal charges because tax enforcement in California is a civil collection process.

California law does authorize warrants to seize and sell property, including primary residences, in rare circumstances, but this does not mean real property will be seized and sold immediately.

It does not mean wages will be garnished indefinitely without any ability to adjust or resolve the situation, nor does it mean the taxpayer cannot negotiate an installment agreement or settlement.

Checklist: What to Do After Receiving an Enforcement

Notice

1. Locate and review the enforcement notice carefully to understand what type of enforcement action is being taken and what the notice requires.

2. Identify the amount owed, including tax, penalties, interest, and any collection costs listed, and confirm this matches your records if possible.

3. Note the deadline for response if one is listed, as some enforcement notices include deadlines for objections, protests, or payment arrangements.

4. Set a calendar reminder so the deadline does not pass without action, and do not ignore the notice.

5. Review your tax return, prior notices, and payment records to determine whether you believe the amount is accurate.

6. Contact the tax agency directly using the phone number listed on the notice to confirm the amount owed and ask about available options.

7. Ask about installment agreement options, as the state may offer payment plans that stop or pause enforcement while payments are being made.

8. Request information about whether a currently active enforcement action can be paused or suspended, as many enforcement methods can be suspended if a payment plan is established or if certain conditions are met.

9. Gather documentation if you dispute the tax debt, including pay stubs, tax returns, receipts, proof of payment, or other records that support your position.

10. Request a written explanation of the tax debt, asking the tax agency to provide details about how the amount was calculated and what tax period it covers.

11. If you cannot pay in full, ask what payment arrangements are available, including installment plans, short-term deferrals, or offers in compromise if your financial situation qualifies.

12. Provide requested financial information within the stated timeframe, as the state may request proof of income, assets, or other documentation.

13. Keep copies of all correspondence, saving notices, letters, phone call notes, and payment records in one secure location.

14. If the state is garnishing wages or levying a bank account, review your pay stubs or bank statements to ensure the amount is correct.

15. Ask whether the enforcement action will pause if a payment is made, as some methods may continue even after partial payment.

Common Mistakes to Avoid

• Missing a deadline listed on the enforcement notice eliminates certain options, so mark

deadlines clearly and respond before they pass.

• Enforcement actions do not automatically end and continue until the tax debt is resolved,

a payment plan is established, or an appeal is granted.

• Failing to read the notice completely causes confusion or missed opportunities because

enforcement notices contain important information about rights, options, and required actions.

• Not providing requested financial information may result in enforcement continuing

without adjustment or negotiation, and you should always confirm that your payment will be credited to the enforcement debt in the amount and manner you intend.

• Missing payments under an installment agreement may result in the plan being

cancelled and enforcement resuming, and without documentation, it is difficult to prove what was paid, when, or to whom if questions arise later.

Frequently Asked Questions

Does state enforcement mean criminal prosecution?

California state tax enforcement is a civil collection process, and criminal prosecution is separate and rare, typically reserved for fraud cases.

Can FTB wage garnishment continue indefinitely?

Wage garnishment typically continues only until the tax debt is paid, an installment agreement is established, or legal circumstances change, and if a payment arrangement is made, garnishment may be suspended.

If the state levies on my bank account, what happens to the funds?

Bank levies capture only the funds on deposit at the time the financial institution receives the levy notice, up to the amount owed. The bank holds funds for ten business days before remitting to the state, giving you time to resolve the issue or file exemption claims.

Can I negotiate the amount owed if I cannot pay?

The state may consider an offer in compromise if financial hardship is documented, though these are not granted in all cases, so contact the tax agency to ask about available options.

What happens if I set up an installment agreement?

Once an installment agreement is approved and you make the agreed-upon payments, enforcement actions are typically suspended, but if a payment is missed, enforcement may resume.

Can I dispute the enforcement action?

If you believe the tax debt is incorrect or the enforcement action is improper, the state typically provides an administrative appeal process, so ask the state about protest or appeal procedures.

Will enforcement affect my credit?

As of April 2018, all three major credit bureaus stopped reporting tax liens on consumer credit reports, so liens no longer appear on credit reports or directly impact credit scores, though they remain public records and may still affect lending decisions.

Taking Action After Receiving an Enforcement Notice

California state tax enforcement is a serious collection action, but it is not the end of the process. Understanding what enforcement means, why it occurs, and what options exist gives taxpayers the information needed to take appropriate action.

Facing State Enforcement or Payroll Tax Issues?

If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.