If you owe the state of California or any county in California taxes, be aware that your debt is taken very seriously and will be aggressively collected. One method used to collect past due taxes is the California Tax Lien.
You will be notified as soon as your taxes are considered late or past due. This notification is sent via mail and always tells you exactly how much you owe and by what date you must contact the IRS. The first of these notices is simply an alert. If you contact the State of California or the county you owe you can work out arrangements such as payment plans. If you fail to respond to the notice California will continue its efforts to collect with increasingly more aggressive methods.
Be aware that the notices sent by California government are not like a summons or other legal documents that must be signed for. These notices are sent to the last known address of the taxpayer.
They do not have to be hand delivered, certified or verified; they simply have to be mailed to the last known address. This is sufficient for the notice to be considered delivered.
If you do not receive the notices this is not an excuse for failing to contact the state of California. You know you are past due on your taxes, therefore it is accepted that you are aware you must make contact.
Failure to contact can lead to garnishments, California Tax Lien and California tax levy. Garnishments include taking a percentage of your paycheck until your debt is paid in full. Remember if you are late on your taxes there are penalties assessed as well as interest which accrues from the original due date. This means your tax debt could easily double in a very short time.
If you receive a California Tax Lien, you will find yourself unable to sell your property, home or any other asset of value. A California Tax Lien puts a hold on your assets as a way to tell you to pay what you owe or risk receiving a Levy which would allow the state to confiscate your assets and auction them off to pay your debt.
Additionally, a California Tax Lien will show up on your credit report. These liens remain on your credit for 10 years or more. Once the lien shows up on your credit, it is up to you to get it removed.
Even after you pay your debt to California, the state does not contact the credit bureaus itself they will issue you a tax lien release. You must then contact the credit bureaus individually yourself to request having the lien removed from your report.
Owing back taxes can quickly make your life a nightmare! The moment you realize that you are not going to be able to pay your taxes by their respective due dates, you need to contact the state. They are much more willing to work with you if you are being proactive rather than if you do nothing and simply wait for a California Tax Lien to be imposed.