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I just found out CA Franchise Tax Board has liens on me for…

I just found out...

I just found out CA Franchise Tax Board has liens on me for the years 1996,1997 &1998. I had no reportable income for those years!

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

As I recall, the FTB sent me notices that they just estimated my income based on prior year tax filings. They had no information from any income source.

Accountant's Assistant: Is there anything else the Accountant should be aware of?

O don't think the liens even show up on my credit report.

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12/29/2017
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,651
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
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Hello. Happy Holidays!! Thank you for choosing this Q&A service for assistance. My name is***** will be assisting you. It sounds like the CA FTB filed tax returns for you which is referred to as a substitute for return. You wrote that you had no income for those years. For some reason, they think you did. Still writing...

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Customer reply replied 4 months ago
Still writing???

Are you sure that you had no 1099s for those years? If the tax liens are not showing up on your credit report, at some point, they might. As far as the statute of limitations for CA to collect tax, if you did not file a tax return, there is no statute of limitations. SEE BELOW:

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If the taxpayer did not file a tax return, or files a false or fraudulent tax return, there is no time limit for FTB to assess tax. FTB will estimate net income from any available information and assess tax based on that estimate. (Revenue and Taxation Code section 19087; Appeal of Arthur H. Hesbon, 81-SBE-154, November 16, 1981.)

REFERENCE SOURCE:

https://www.ftb.ca.gov/law/summaries/sol_assessment.pdf

You can refer to the reference source for more detailed information regarding assessments.

------------------------------------------

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Customer reply replied 4 months ago
I am positive there were no 1099's or W-2's. I did not file. They just estimated my income based on previous filings.

Yes, when they do that, as mentioned in my previous response, it is referred to as filing a SFR (Substitute for Return). Typically when a state taxing agency or the IRS files an SFR, this is because they have reason to believe or know that some income was earned and not reported. As the matter is from 1996-1998, the FTB will not have any information on those years. Unfortunately, the burden of proof is on you to show that they filed the liens in error. Still writing...

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Taxpayer's Burden of Proof

FTB's determination is presumed correct and the taxpayer bears the burden of showing error in such determination. (Appeal of ***** *****ston, 82-SBE264, November 17, 1982.) In order to carry that burden, the taxpayer must point to an applicable statute and show by credible evidence that he/she comes within its terms. (Appeal of Robert R. Telles, 86-SBE061, March 4, 1986.)

REFERENCE SOURCE:

https://www.ftb.ca.gov/law/summaries/sol_assessment.pdf

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Customer reply replied 4 months ago
I had no reportable income, they no longer have any info from those years and I have to prove there assessment is incorrect??? How do I do that??? This sounds like the "mafia" is running things!

If you can prove that you had no income and was not required to file for those years, that would be a start. After proving that you had no income and was not required to file a tax return, you can request a withdrawal of the tax lien. I will get the information for you on how to request a withdrawal of the lien. I will get back to you shortly.

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Customer reply replied 4 months ago
OK

You can contact the FTB and let them know that the liens were filed in error and you are requesting a lien release. If they find this to be the case, they will issue a lien release. You can contact the FTB liend department at the following number,(###) ###-####

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Customer reply replied 4 months ago
This should be interesting. It sounds like the perfect "catch 22" situation. I bet I will have to sue them to get the liens released. Thanks for the info.

FTB uses two documents to release a filed State Lien:

1. FTB will issue a “Notice of Release of State Tax Lien” (State Release) when the tax liability is satisfied or has become legally unenforceable. FTB also has the discretion to issue this notice in instances where it determines that releasing a lien would facilitate the collection of the tax liability or the release would be in the best interest of the state and the taxpayer.

2. FTB can issue a “Notice of Release of State Tax Lien Filed in Error” (State FIE) if FTB determines any of the following: • A State Lien was filed in error, • A State Lien was filed contrary to administrative procedures, • A State Lien was filed after a taxpayer enters into an installment payment agreement to satisfy the tax liability for which the State Lien was issued, unless the agreement states otherwise.

Upon request of the taxpayer, FTB is required to mail a copy of the State FIE to the major credit reporting companies in the county where FTB filed the State Lien.

REFERENCE SOURCE:

https://www.ftb.ca.gov/Archive/Law/legis/11_12bills/SB228_042511.pdf

Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,651
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
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Let's hope that you won't have to sue them. If you find that you are getting nowhere with the FTB regarding this matter, my suggestion is to seek the assistance of a Taxpayer Advocate. Their services are free. The contact information for the CA Taxpayer Rights Advocate is as follows: ***-***-****.

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Thank you for the positive rating, I do appreciate it.

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Customer reply replied 4 months ago
Your welcome.

Please ignore. No need to respond. The system is prompting me to send a response in response to your last response.

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