California FTB Notices: What They Mean and What to Do
Receiving a notice from the California Franchise Tax Board (FTB) can be alarming — but it doesn’t always mean you’ve done something wrong. FTB notices are often generated automatically and may relate to mismatched income, missing information, or unpaid balances.
Understanding why the notice was issued and how to respond is critical. Ignoring it can make a manageable issue much worse.
Why the FTB Sends Notices
The FTB commonly issues notices when it believes there is:
Unreported or underreported income
A mismatch between federal and California returns
Missing documentation or forms
An unpaid tax balance, penalties, or interest
Residency or filing status discrepancies
Many notices are triggered by information the FTB receives from the IRS, employers, or financial institutions.
Common Types of FTB Notices
Some of the most frequent notices include:
Proposed assessment notices for additional tax due
Demand for payment letters
Return information notices requesting clarification
Residency or income verification requests
Each notice has specific response deadlines and instructions.
What Happens If You Don’t Respond
Failing to respond can lead to:
The FTB finalizing its proposed assessment
Additional penalties and interest
Wage garnishments or bank levies
Tax liens filed against your property
Even if the notice is incorrect, silence is treated as agreement.
How to Respond Correctly
Before responding:
Read the notice carefully and note all deadlines
Verify the income or issue being questioned
Gather supporting documents
Avoid paying or agreeing prematurely if the notice is incorrect
Responses must be complete, accurate, and timely.
Residency Notices Are Especially Serious
FTB residency inquiries often involve:
Requests for travel records and calendars
Housing and lease documentation
Employment and business activity details
Banking and investment account information
These audits can span multiple years and require careful handling.
When Professional Help Matters
FTB notices can escalate quickly if mishandled. Professional assistance is especially important when:
Large dollar amounts are involved
Residency is questioned
Multiple years are under review
You disagree with the FTB’s position
Early intervention often leads to better outcomes.
How All California Accountancy Can Help
At All California Accountancy, we assist clients with:
Reviewing and interpreting FTB notices
Preparing and submitting formal responses
Resolving proposed assessments
Representing clients in audits and appeals
Negotiating payment arrangements
FTB notices don’t have to be overwhelming — but they do require prompt, informed action.
Disclaimer
This article is for educational purposes only and does not constitute legal, tax, or accounting advice. Consult a qualified CPA regarding your specific situation.
IRS Circular 230 Disclosure: Any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties or promoting, marketing, or recommending any transaction or matter addressed.