Top Tax Relief Options for California Taxpayers
Introduction: Relief is Possible — You Just Have to Know Your Options
If you’re dealing with significant tax debt, you might feel like there’s no way out. Whether it’s from the California Franchise Tax Board (FTB) or the IRS, the state and federal governments are relentless when it comes to collecting taxes.
But the good news is, you have options.
From
Offers in Compromise to
installment agreements, California taxpayers can access a variety of relief options designed to reduce the burden and get you back on track.
In this guide, we’ll walk you through the top tax relief options available to California taxpayers, including which ones may be best for your unique financial situation.
1. Offer in Compromise (OIC)
What is it?
An Offer in Compromise allows you to settle your tax debt for less than you owe. If you qualify, you pay a reduced amount that the FTB or IRS agrees is the most they can reasonably collect from you.
Who qualifies?
- You can’t pay your full tax debt due to financial hardship
- Your tax debt exceeds your ability to pay over time
- You’re in non-collectible status
How to Apply:
You’ll need to provide full financial disclosure, showing your income, expenses, and assets. A tax resolution CPA can help you put together a solid case.
2. Installment Agreements
What is it?
An installment agreement allows you to pay off your debt in smaller, manageable payments over time. It’s one of the most common options for taxpayers who can’t afford to pay in full.
How does it work?
- The FTB or IRS will set up a payment plan based on your financial situation.
- You’ll make monthly payments for 12–72 months.
- Interest and penalties continue to accrue, but you’ll stop the immediate threat of collection actions.
3. Hardship Deferral (Temporary Pause on Collections)
What is it?
If paying your tax debt would cause extreme financial hardship, you may qualify for a hardship deferral. This temporarily suspends collections like levies and garnishments.
Who qualifies?
- You have little to no income
- You can’t afford basic living expenses
- You’re facing serious health issues, a job loss, or a natural disaster
How to Apply:
This process involves submitting your financial details to the FTB or IRS and demonstrating that paying your tax debt would jeopardize your basic needs.
4. Penalty Abatement
What is it?
Penalty abatement allows you to have penalties removed from your tax balance if you have a valid reason for being late, such as illness or natural disaster.
How to Request It:
You must provide proof of reasonable cause (e.g., medical records, disaster declarations) and show that the failure to pay was beyond your control.
5. Innocent Spouse Relief
What is it?
If you filed jointly with your spouse and are now facing tax debt that is solely their responsibility, Innocent Spouse Relief can help protect you from paying their debt.
How It Works:
The IRS or FTB may agree to remove your responsibility for the debt if you can prove:
- You didn’t know about the debt
- The debt is solely related to your spouse’s actions
- You will suffer financial hardship if forced to pay
6. Bankruptcy (Last Resort)
What is it?
In some cases, bankruptcy may eliminate certain tax debts, but this option is typically reserved for extreme cases where all other relief options have been exhausted.
Who Qualifies?
You may qualify for bankruptcy if:
- Your tax debt is older than 3 years
- You’ve filed all required returns
- Your debts exceed your ability to pay
How Boulanger CPA Helps with Tax Relief
At Boulanger CPA, we help Orange County residents and California taxpayers navigate these complex relief options. Whether you’re seeking a manageable payment plan, an Offer in Compromise, or penalty removal, we offer personalized, expert tax resolution services.
Contact Us for a Free Tax Relief Consultation
Don't let tax debt control your life any longer. We can help you find the best resolution option and guide you every step of the way.
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Call now:
657-218-5700
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Book online:
orangecounty.cpa/schedule
Serving all of Orange County
Frequently Asked Questions
What are the main tax relief options in California?
Options include Offers in Compromise, installment agreements, hardship deferrals, penalty abatement, and in rare cases, bankruptcy.
Can I settle my tax debt for less than I owe?
Yes, through an Offer in Compromise with either the IRS or FTB. You must show that you’re financially unable to pay the full amount.
How do I qualify for a hardship deferral?
You must show that paying the tax would prevent you from meeting basic living needs (rent, food, medical care). The FTB may pause collections temporarily.
What’s the fastest way to get relief?
Filing missing returns, entering a payment plan, and requesting penalty relief can provide immediate breathing room and stop enforcement actions.
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