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Jeopardy assessments: the state doesn't always have the right answer

Jeopardy is the name of a long-running and widely popular American game show. But it is also a term of art in California tax law.

In this post, we will explain what that means for you as a taxpayer and how our firm can help you respond if it becomes an issue.

When the California Franchise Tax Board makes a "jeopardy assessment," that essentially means it is trying to jumpstart the collection process. In a tax dispute, normally there are ample protections allowing for due process in collection efforts.

But with a jeopardy assessment, California revenue authorities seek to impose an immediate lien on your property in order to seize it right away.

The premise behind this maneuver is that if immediate action is not taken, you might move your money or property out of the state authorities' reach.

Jeopardy assessments sometimes happen in the context of disputes about California residency. For example, authorities may contend that you owe California taxes, even though you moved away from the state years ago.

Don't be cowed by the Tax Board's attempt to play a jeopardy assessment as some sort of trump card. With the help of a skilled tax attorney, you still have options.

For example, even the Tax Board admits that a jeopardy assessment doesn't apply if you are in bankruptcy. There may be other avenues of attack as well through aggressive litigation.

In short, in the tax collection game, jeopardy may be a question. But it is not always the final answer.

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