California Franchise Tax Board Debt Forgiveness
February 3, 2020

California Franchise Tax Board Debt Forgiveness


Have you heard of an FTB offer in compromise? It’s rare, but it can happen in certain cases. Read on to learn more about how you can potentially get California tax debt forgiveness, and what some of the requirements are to qualify.

All About The California Franchise Tax Board

As you know, every taxpayer must pay both federal and state taxes on their income. The state of California Franchise Tax Board oversees the tabulation and payment of CA state taxes, specifically. Their website is, and you can find a whole host of resources and information pertaining to your state tax obligations on this site.

So, what does the California FTB want to see in order to grant someone debt forgiveness? Basically, they want to see that you are at the end of your rope financially and experiencing serious extenuating circumstances. If you’re over 50, the odds of leniency from the CA FTB increase.

To be considered for California debt relief, you also need to demonstrate that you’re not living above your means — there will be an examiner assigned to your case, and if they look at your monthly expenses and determine that you’re living a lifestyle you can’t really afford, this will negatively affect your chances at leniency (which they reserve for true “hard luck” cases).

If you’re hoping for CA state tax forgiveness, your best bet is an “offer in compromise,” in which you negotiate a smaller amount than your actual owed total.

Franchise Tax Board Payments & Options

The bad news is, it’s considered more difficult to obtain an offer in compromise agreement with the CA FTB compared to the IRS. In fact, we’ve seen plenty of cases where a taxpayer was able to get an offer in compromise accepted with the IRS, only to be denied by the California FTB. If you can get it, an offer in compromise for an amount less than your actual owed tax obligation is the #1 best way to achieve debt forgiveness in California.

That said, since the majority of petitioners won’t be granted a California FTB offer in compromise, it’s worth taking a look at some of the other options the state makes available to ease your unpaid tax debt burden.

  • Payment Plan – For many taxpayers, a fair payment plan is the second best option if an FTB offer in compromise isn’t available. Breaking up what seems like an impossible tax debt into easier-to-swallow monthly installments can get you out of the “hole” in just a few months’ time.
  • Qualify For Hardship – If you just need a temporary reprieve from life’s circumstances, consider applying for “hardship” status with the CA FTB. This won’t change the total amount owed at all, but it will push “pause” on due dates and collection activities to give you a chance to get back on your feet. For some people going through major life upheaval, hardship status can be a lifesaver while they get their financial affairs in order.

There are other potential avenues to explore, such as filing for bankruptcy or simply gritting your teeth and paying the owed state tax amount in full — but it’s best to consult with a knowledgeable tax attorney before pulling the trigger on any of these major decision points.

California Franchise Tax Board Attorneys

If you’re finding yourself knee-deep in California payroll tax problems, it can be incredibly stressful to feel like you’re left to your own devices to find your way out. A qualified CA FTB tax attorney like the ones at Abajian Law can take the burden off your shoulders and put it squarely on their own — so that you know you’ve got California’s best and brightest advocating for you.

The CA Franchise Tax Board is not to be taken lightly or approached in an unprepared manner. Although they can seem like a large, faceless, and unfeeling organization, that is not actually the case. Your situation will be reviewed by real people who keep an open mind about truly difficult situations that taxpayers may be facing — and they have been known to take extraordinary measures to grant leniency on occasion.

Often times, you’ll only get one good shot to make your case to the IRS and California FTB about why you deserve tax debt relief. Make it your best effort by enlisting the help of experienced tax lawyers like the ones at Abajian Law.

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