The Board of Equalization administers sales and use taxes, property taxes, special taxes, and the tax appellate program. The BOE can be very aggresive if any of these taxes go unpaid. We have helped thousands of businesses and individuals get tax relief from the BOE, other California tax departments, as well as the IRS.
A tax lien is a legal claim against real or personal property to secure a debt. If you have a delinquent tax balance, the BOE may record a lien to secure the tax debt.
The lien encumbers your California property, preventing you from refinancing, selling, or transferring it through escrow. In addition, credit bureaus monitor public records for recorded liens. If the BOE records a lien against you, they have secured a legal right to enforce collections, which may include bank levies and other asset seizures.Return to top
An Offer in Compromise (OIC) is a proposal made by the taxpayer to the BOE to pay less than the amount due to settle liabilities that cannot be paid in full. In order to participate in the BOE Offer in Compromise program, the following conditions must be satisfied:
Offers for liabilities with a fraud penalty will require a minimum offer of the tax and fraud penalty. The minimum offer can be waived if it can be shown that the taxpayer making the offer was not the person responsible for perpetrating the fraud. This situation applies to partnership accounts where the intent to commit fraud can be clearly attributed to another partner.
Offers will not be considered in situations where the taxpayer has been convicted of criminal fraud for fraudulent behavior during the audit period.Return to top
Short term payment proposals may be considered. If a taxpayer’s payment history is unsatisfactory, an exception may be granted at the discretion of the district. Short-term payment plans generally do not exceed twelve months in length. Payment are generally made on a weekly basis. Current tax returns and prepayments must be filed and paid timely as a condition of the payment plan.
If a short-term payment proposal exceeds two months on an active account, the taxpayer may be required to make weekly or monthly payments against the anticipated return for the upcoming period.Return to top
Installment agreements may be terminated due to late installment payments, delinquent or partial payments, or failure to disclose assets or income on a financial statement. Other reasons for termination could include a failure to increase payment levels as requested based on new assets or income, or a failure to comply with a review of financial status.Return to top
Long term payment plans are generally for a period of twelve months or longer. Before accepting any proposal, the financial condition of the tax debtor will be thoroughly investigated. This will involve a complete financial statement and a formal request for an installment agreement. If a tax debtor has cash equal to the tax liability, immediate payment will be demanded. If there are assets with value and a tax debtor is unwilling to raise money from them, enforcement action may be taken by the state.
Allowable expenses: There are two types of allowable expenses — necessary and conditional.
Necessary expenses must meet the necessary expense test. The necessary expense test is a general rule that states that the expense must provide for a tax debtor's and his or her family's health, welfare or production of income. In some situations, the BOE representatives will make a judgment call to determine if the expense qualifies as necessary. The expenses must be reasonable in amount. The total necessary expenses establish the minimum a tax debtor (and family) needs to live.
These expenses do not meet the necessary expense test. However, they are allowable if the tax liability, including projected interest and penalty accruals, can be paid in full within three years.
You may have a qualified professional represent you. This requires that you have a power of attorney form completed and signed before any tax matter can be discussed with your representative. The state of California accepts the BOE-392 Power of Attorney for this purpose.
Below are links to information on California's other two taxing authorities:
The BOE may issue warrants for enforcement of liens and collection of amounts due. A Notice of Levy, rather than a warrant, will be used to levy on money, or right to money, held or controlled by the tax debtor or by a third party.
Levies pursuant to warrants, with the exception of wage levies, are made by sheriffs, marshals, constables or California Highway Patrol. Upon receipt of the warrant, the officer is required to promptly serve the levy and take possession of the available assets according to the instructions that accompany the warrant.
If the asset consists of money, the person served is required to turn the money over to the officer who will turn the money over to the BOE for the credit of the taxpayer’s account after deducting fees, expenses and commissions. If the asset is other than money, the officer will take possession and arrange for sale to the highest bidder at public auction.Return to top
We strive to save our clients money, time and stress. Just as there are many different tax related problems, there are many options for tax resolution. Call us at 888-902-0778 for a free consultation. In a few minutes we will help you to better assess what options are best for your unique situation.