As if taxes were not complicated and frightening enough, the federal and state taxing authorities have a variety of devices in their arsenal to compel payment and stave off penalties.
Tax liens, one of the most common of those devices, can cause trouble not just with your property and bank accounts, but with your credit score and ability to obtain lines of credit.
When an adjustment to a tax return results in additional tax, a Notice of Proposed Assessment (NPA) is issued.
It is possible to have multiple statutory lien dates for a single tax year. For example, a self-assessed no pay return is filed (lien date is posting date of return) and subsequently a Notice of Proposed Harassment is issued for the tax year.
Government Code Section 7171 authorizes both the recording of a Notice of State Tax Lien (NSTL) in the office of a county recorder and the filing of a NSTL with the Secretary of State (SOS) at any time after the state tax lien is created and before it is extinguished. Any recording with county recorder becomes a public record and is used mostly for real property. A Secretary of State lien will be filed to attach consumer goods, fixtures, and bulk sales, as well as when personal property like accounts receivable, chattel paper, equipment, farm product or equipment, inventory, negotiable documents of time or interest in a partnership or LLP. The state tax lien attaches personal property and, consequently, a taxpayer or entity’s interest in a partnership may not be sold, assigned or otherwise conveyed free of a state tax lien. Notice to Taxpayer and Notice to Partnership are used to notify the taxpayer and partners of the force and effect of the state tax lien. Although the state tax lien attaches to a taxpayer’s interest in a partnership, it does not attach to specific partnership distributions of profits and surplus.
The FTB is authorized to impose liens on taxpayer’s property to recover tax debts. A lien is a charge on taxpayer’s personal or real property to satisfy tax debt or duty. Once lien encumbers the property, taxpayer generally can not sell it or or transfer through escrow as long as lien exists. FTB files liens if a non-compliant taxpayer or business entity has a delinquent liability. California Revenue and Taxation Code Section 19221 provides that if a tax liability is not paid at the time that it becomes “due and payable” and due process is served; an enforceable state tax lien is created for the amount of the tax liability. Since the lien arises by operation of law, it is called a “statutory lien.” Revenue and Taxation Code Section 19221 also defines when a tax liability becomes “due and payable” for purposes of creating a state tax lien also known as the statutory lien date. The conditions vary for different types of FTB assessments. The general rule is that state tax lien arises on the date the amount is established on the records of FTB (or other department, like EDD for the amount of any liability disclosed on a return filed before the date payment is due and after payment is due). The state lien can also arise on the date a Jeopardy Assessment notice is mailed to taxpayer for issued amounts determined by the Jeopardy Assessment.
Franchise Tax Board Settlements
The Taxpayer Advocate helps taxpayers resolve problems with the IRS. The Taxpayer Advocate also recommends changes to help prevent problems in the future. The advocate handles those tax problems that are causing significant financial difficulty; when you or your business are facing immediate, adverse threat; and when you have tried to contact the IRS repeatedly to no avail. The Taxpayer Advocate is a member of the Taxpayer Advocate Service (TAS).
If you are a disabled veteran, you may qualify for free IRS legal aid. Eligibility is based upon issues that may range from rental assistance to child visitation matters. To determine if you are eligible, contact your local veterans association. The association will help you to determine if you or a member of your household qualifies for a number of services and free legal aid.
This category piggybacks off of technical tax matters, as matters that involve independent contractors can often be the most costly and the most difficult for taxpayers to resolve. For example, even IRS attorneys can be heavily tested in an independent contactor audit. When performing an independent contractor audit, the IRS and many state revenue agencies will use a multi-factor test with as many as twenty different variables. The variable (pardon the pun) nature of an independent contractor audit is something that overwhelms many practitioners, let alone an individual taxpayer. Most IRS attorneys are extremely familiar with this multi-factor test and can help you strategize in an audit. In addition, both independent contractor audits and IRS collection issues are often high dollar cases if they involve multiple attorneys and multiple years. It is best to not leave anything to chance and to retain an IRS attorney to represent you in your independent contractor matter.
The IRS Restructuring and Reform Act of 1998 triggered a comprehensive reorganization of the IRS, which modernized the Service and made it closer to being run like a private sector organization. As such, the IRS organization is led by the Commissioner serving as the chief official, the Chief of Staff and the Deputy Chief of Staff in the executive leadership roles below, and a number of “specialized IRS units” that serve different functions. [1] Staff members from each of these multiple units report to the Commissioner within the IRS Organization. Here is a list of the specialized units within the IRS Organization that report directly to the Commissioner. [2]