What Happens If You Ignore FTB Notices?

Introduction: You Might Be Ignoring More Than Just a Letter

If you’ve received a notice from the California Franchise Tax Board (FTB) and shoved it in a drawer, you’re not alone — but you're putting your income, credit, and property at risk.

Unlike the IRS, the FTB is faster and more aggressive when it comes to enforcing collections. What starts as a “friendly reminder” can quickly become a bank levy, wage garnishment, or tax lien — often within weeks.

This post explains exactly what happens if you ignore FTB notices, how fast they escalate, and how Orange County taxpayers can take control before things get worse.

📬 Types of FTB Notices and What They Mean

Before you know the risks, you need to understand the types of notices the FTB sends — and what they actually mean.

📨 1. Notice of Tax Due

Sent when you filed a return with a balance or failed to pay a previous year’s liability.

• Includes your balance due, due date, and penalty/interest accrual
• If ignored, it leads to a Demand for Payment

🧾 2. Demand for Tax Return

Issued if the FTB has record of income (e.g., W-2s or 1099s) but no corresponding return on file.

• If you ignore this, the FTB may issue a Notice of Proposed Assessment and file a Substitute Return for you.

👉 How to Get Back Into Compliance with the FTB (Non-Filers Guide)

📉 3. Notice of Proposed Assessment (NPA)

A proposed tax bill based on income the FTB believes you failed to report.

• You have 60 days to respond or protest
• If you don’t, the balance becomes legally enforceable

🔔 4. Final Notice Before Levy

A last warning before the FTB seizes your bank accounts or wages.

• Ignoring this can lead to immediate garnishments or levies
• The FTB does not need a court order

👉 What to Do If You Receive a Levy from the FTB

🚨 What Happens If You Ignore These Notices?

💣 1. Substitute Return Filed

The FTB can file a return on your behalf — often without any deductions, credits, or exemptions.

• Results in a higher tax bill than necessary
• Can trigger additional enforcement notices

💸 2. Wage Garnishment

The FTB can garnish your wages using a fixed exemption formula (not a percentage like the IRS).

• You could lose $300 to $1,200+ per paycheck depending on income
• It continues until the debt is paid or resolved

👉 Wage Garnishment in California: Know Your Rights

🏦 3. Bank Account Levy

Your checking or savings account can be frozen and emptied — without court involvement.

• You may not know it’s coming until your account is locked
• Funds are seized and applied to your tax debt

🏠 4. Tax Lien Filing

The FTB can file a lien on balances as low as $100 — seriously affecting your credit and ability to borrow.

• Liens are public records
• They appear on mortgage applications and business loan screenings

👉 How to Remove an FTB Tax Lien in California

⚠️ 5. Suspension of Licenses

For certain tax balances, the FTB may recommend suspending your:

• Driver’s license
• Professional or occupational license (e.g., contractors, CPAs, attorneys)

📉 6. Penalties and Interest Accrue Daily

Ignoring a balance means you’re also ignoring the 5% monthly filing penalty, 0.5% monthly payment penalty, and daily compounded interest.

👉 California Back Tax Penalties and Interest Explained

❗ 7. You Lose Appeal Rights

Some notices (like NPAs) come with strict deadlines. If you miss them:

• You lose your right to protest
• The balance becomes final
• Your only remedy is payment or settlement
• 
  

✅ What You SHOULD Do If You’ve Ignored FTB Notices

✅ 1. Get a Transcript of Your FTB Account

Request your full FTB transcript to see what they’ve assessed and when. Your CPA can do this on your behalf with a Power of Attorney.

✅ 2. Respond to the Most Recent Notice

Even if previous notices were ignored, it’s not too late.

• Focus on the most recent active notice
• Send a written response or file the correct return
• Don’t call the FTB without guidance — responses matter

✅ 3. File Any Missing Returns

Avoid further assessments or substitute filings by submitting real returns.

👉 How to Get Back Into Compliance with the FTB

✅ 4. Request a Payment Plan or Relief

You may be able to stop collections with:

• An Installment Agreement
• A Hardship Deferral
• An Offer in Compromise if you qualify

👉 Top Tax Relief Options for California Taxpayers

✅ 5. Request Penalty Abatement

If you ignored notices due to hardship or misinformation, you may qualify for penalty removal.

👉 Can You Get California Tax Penalties Removed?

🧭 How Boulanger CPA Helps Orange County Taxpayers

We help individuals and small business owners in Irvine, Santa Ana, Anaheim, Tustin, and across Orange County:

• Interpret and respond to FTB notices
• File missing returns or reverse substitute assessments
• Stop levies, liens, and garnishments
• Negotiate affordable resolution plans
• File for penalty abatement or hardship relief

📞 Call 657-218-5700
🌐 www.orangecounty.cpa

Frequently Asked Questions