Tax professionals explain differences between FTB notices, what tax payers should know

Receiving a tax-related notice often triggers anxiety, as most people assume it’s from the Internal Revenue Service (IRS). However, California residents should also be aware that they may receive official tax correspondence from the California Franchise Tax Board (FTB), which administers state income taxes.

FTB sends notices for four primary reasons: requests for information, additional tax assessments, delinquency or collection notifications, and tax refund updates. Understanding these notices in advance can help taxpayers respond appropriately without unnecessary panic.

Tax professionals emphasize the importance of thoroughly reviewing any FTB correspondence to understand the reason behind it. Taxpayers should check for potential errors in their filings and respond within the required deadlines. If the situation is complex or the notice is difficult to interpret, consulting a Certified Public Accountant (CPA) or tax expert is highly recommended.

For better clarity, here are explanations of common FTB notices.

FTB 4600B
FTB 4600B requests documents such as W-2s or 1099s to verify income accuracy in tax filings.

FTB 3726
FTB 3726 indicates errors or missing amounts in a tax return and proposes an additional tax assessment.

FTB 4987
FTB 4987 means a final warning before asset seizure. If unpaid taxes are severe, this notice signals the intent to levy bank accounts or wages, requiring immediate action.

FTB 3904
FTB 3904 is a general collection notice for outstanding taxes. To avoid penalties or levies, taxpayers must promptly settle the balance or arrange a resolution.

FTB 4058C
FTB 4058C provides tax refund details, including any adjustments if discrepancies exist between the filed return and FTB’s records.

FTB 3713
FTB 3713 is sent when no tax return has been filed for a specific year.

FTB 916
FTB 916 is used to inform taxpayers of penalties or adjustments due to late filing or late payments.

FTB 4183
FTB 4183 offers installment payment options for those unable to pay their full tax liability at once.

FTB 4734D
FTB 4734D requests identity verification documents when there is suspicion of identity theft or uncertainty regarding personal information.

FTB 4624
FTB 4624 is used to notify taxpayers of discrepancies between reported income and employer-reported information received by FTB.

By staying informed about these notices and their implications, taxpayers can address FTB correspondence effectively, avoid unnecessary penalties, and ensure compliance with California tax laws.

BY WONHEE CHO [cho.wonhee@koreadaily.com]