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CA FTB Enforcement – License Suspension or Denial

The California Franchise Tax Board (FTB) can initiate the suspension or denial of professional, occupational, and even driver’s licenses for individuals and businesses with significant tax delinquencies. This action is part of the state’s effort to collect unpaid taxes under the authority of Assembly Bill (AB) 1424. 

How the Process Works

  • Certified List: The process begins when a taxpayer’s name appears on a “certified list” of the 500 largest tax delinquencies (over $100,000) maintained by the FTB and the California Department of Tax and Fee Administration (CDTFA).
  • Preliminary Notice: The individual or business receives an initial notice of suspension, giving them 90 days to resolve the issue.
  • Compliance Period: During these 90 days, the taxpayer must either satisfy all outstanding tax obligations or enter into an approved installment payment plan with the FTB or CDTFA.
  • Suspension: If the taxpayer fails to come into compliance within the 90-day window, the relevant state licensing agency (e.g., Department of Real Estate, Department of Consumer Affairs boards) is notified and must suspend the license.
  • No Refund: The law prohibits licensing agencies from refunding any fees paid for the issuance or renewal of a license when the license is denied or suspended due to tax delinquency. 

Consequences of Being on the List

In addition to license suspension, delinquent taxpayers on the Top 500 list face other significant consequences: 

  • Public Disclosure: Their name, address, and the amount of tax debt are made publicly available.
  • Contract Prohibition: State agencies are generally prohibited from entering into contracts for goods or services with listed taxpayers.
  • Driver’s License: A delinquent taxpayer’s driver’s license may also be suspended.
  • Business Entity Status: A business entity (corporation or LLC) can also be suspended or forfeited by the FTB for failure to file returns or pay taxes, which impacts its legal standing to operate in the state. 

How to Resolve the Issue

To have a license reinstated or avoid suspension, a release notice from the FTB or CDTFA is required. This is obtained by paying the full debt or establishing a formal payment arrangement. 

If you believe you are on the list in error or need to make arrangements, contact the FTB at (866) 418-3702 or the CDTFA at (916) 323-8624. You can also check the FTB certified list online.