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California tax agency publishes list of top 500 tax delinquencies

California law is tough on delinquent taxpayers. The California Franchise Tax Board, known as the FTB, is the state equivalent of the IRS and is required by law to publish twice per year the list of the top 500 delinquent individual and corporate income taxpayers against which the state has filed tax liens.

Only taxpayers owing more than $100,000 in delinquent taxes are considered for inclusion on the list.

On August 12, the agency sent written notices to the taxpayers impacted that their names, addresses, dates of earliest recorded tax liens and amounts of state taxes owed will be published on the FTB website during the week of October 3, 2016. Significantly, the list also identifies whether an individual holds a state professional or occupational license, along with the status of the license and its number. For corporate taxpayers, the list identifies the principal officers and their titles.

In addition to the large income tax amounts owed, those on the list may face other negative repercussions. For example, the state of California may suspend their professional licenses and their driver's licenses. Those on the list are also not eligible for government contracts with state agencies for goods and services.

To illustrate the amount of money at issue, the current list shows:

  • The highest amount of corporate tax (called business entity or BE tax) owed is more than $28 million.
  • The total amount of corporate tax owed collectively by those on the list is more than $68.6 million.
  • The highest amount of individual tax (called personal income tax or PIT) owed is almost $12.5 million.
  • The total amount of individual tax owed collectively by those on the list is more than $149 million.

When a taxpayer resolves its case with the FTB, the list is updated online by removing that name. It is important that anyone facing state (or federal) tax delinquency contact a tax attorney to discuss what options are available for working with the FTB to resolve the matter. Legal counsel will communicate on behalf of the taxpayer with the agency and negotiate on the client's behalf. If appropriate, the tax lawyer can challenge the amount the agency claims is owed and advocate for other relief for the taxpayer.

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