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How a Tax Attorney Can Help with Your Tax Lien

May 25, 2026December 21, 2016 by Brotman Law

Key Takeaways

All three agencies can issue a lien against personal property, real or personal, tangible or intangible.
The tax law is not only more complex in California, but the state tax representatives are generally more difficult to deal with.
A tax attorney helps to level the playing field when dealing with the state of California and their representatives.

Our last few posts have been about how the various California state tax agencies handle tax liens.

A brief review:

The Board of Equalization (BOE) administers the sales and use tax.
The Franchise Tax Board (FTB) administers and enforces the individual and corporate state income tax laws and property taxes.
The Employee Development Department (EDD) administers payroll tax and unemployment and disability insurance for the state.

How the Franchise Tax Board Uses Tax Liens

May 25, 2026December 7, 2016 by Brotman Law

The California Franchise Tax Board files a Certificate of State Tax Lien once a California income tax balance has been assessed and a demand for payment has gone unanswered — and once recorded, that lien attaches to everything you own in the state.

The lien is not a seizure. The FTB is not taking your house when it files a lien. But the lien becomes a public record that clouds your title, shows up on credit and title reports, and follows any property you acquire after the recording date.

How the FTB Lien Process Works

The FTB records a Certificate of State Tax Lien after the tax is assessed, a notice and demand is issued, and the balance remains unpaid.

Under California Government Code § 7170, the Certificate of State Tax Lien is filed with the county recorder’s office for real property, or with the California Secretary of State for personal property and business assets under the UCC filing system. From the moment it’s recorded, the lien is public record — showing up on title searches, business credit reports, and Secretary of State filings. It also attaches to after-acquired property: real estate or significant personal property you purchase after the recording date becomes subject to the lien as soon as you take ownership.

What an FTB Lien Actually Does to Your Property

A recorded FTB lien does not mean the FTB is actively trying to seize assets — that is a levy, which is a separate action — but it does prevent you from selling or refinancing without addressing the lien first.

Any real property with an FTB lien on title cannot be sold or refinanced without either paying the lien off at closing or getting the FTB to release or subordinate it. Title companies will not insure around a state tax lien. If you’re trying to refinance, the FTB lien sits ahead of any new money you’re trying to borrow.

For business owners, an FTB lien that attaches via the Secretary of State UCC filing can complicate financing, supplier credit, and banking relationships. It signals to anyone who searches public records that there is an unresolved tax balance.

How to Get an FTB Lien Released

Full payment is the straightforward path — the FTB releases the lien within 40 days of payment in full — but several other tools can address the lien before full payment is possible.

An installment agreement stops new liens from being filed while you’re current, but does not release the existing lien. The lien stays on title until the balance is paid.

An Offer in Compromise changes the picture. If the FTB accepts the offer, the lien is released when the offer amount is paid — settling the liability for less and resulting in clean title upon completion.

Two FTB tools are specifically useful when a lien is blocking a transaction:

A lien discharge releases one specific piece of property from the lien without releasing the lien overall. If you’re selling a particular real estate parcel and the FTB lien is blocking title, a discharge on that property allows the sale to close while the lien stays in place against your other assets.

A lien subordination moves the FTB’s lien to a junior position to allow a senior lender — typically a mortgage lender — to refinance ahead of it. The lien does not go away, but it steps back to let the loan proceed.

FTB Liens vs. IRS Liens — Two Separate Problems

If you owe both state and federal income taxes, you may have an FTB lien and an IRS lien on the same property at the same time — and they have to be resolved separately.

IRS federal tax liens operate under IRC § 6321 and federal law; FTB liens operate under California law. Priority generally follows “first in time, first in right” — whichever lien was recorded first has the superior position. Getting on an installment agreement with the IRS does not pause FTB collection, and vice versa. Both resolution tracks need to be running in parallel.

For more on the FTB’s collection process, see our overview of California Franchise Tax Board collections. If you’re weighing your options, our page on working with a California tax debt attorney walks through how resolution typically unfolds. Book a free 15-minute call to talk through your lien situation specifically.

Frequently Asked Questions

How long does an FTB lien stay on my credit?

An FTB tax lien recorded with the county recorder or Secretary of State can appear on your credit report for up to seven years from the date of filing. Once the lien is released — through full payment, an accepted Offer in Compromise, or other resolution — you can request a lien release certificate from the FTB and submit it to the credit bureaus to update your report.

Can the FTB seize my property without warning?

No. A lien and a levy are different actions. The lien establishes the FTB’s claim against your property. An actual seizure requires a separate levy notice and a 30-day waiting period after a final notice of intent to levy. You receive written notice before any seizure action, and you have rights to appeal through the FTB’s collection due process procedures.

Does entering an FTB installment agreement release the lien?

Generally, no. The FTB typically keeps a recorded lien in place until the full balance is paid, even while you’re current on an installment agreement. The agreement prevents new collection actions, but the lien itself remains on title. Full payment, an accepted OIC, or a specific lien discharge or subordination request is required to remove the lien from a particular piece of property.

What is the difference between a lien discharge and a lien subordination?

A discharge removes the FTB’s lien from one specific piece of property — useful when you’re selling that property and need clear title. A subordination moves the FTB’s lien to a junior position to allow a new senior lender to proceed — useful when you’re refinancing. The lien continues to exist in both cases; only the scope or priority changes.

Have a Tax Question or Notice?

If you’re dealing with an IRS audit, collection action, California state tax matter, or any other tax issue, we can review your situation in a free 15-minute consultation.

Schedule a Free Call → Or call: (619) 378-3138

How the Board of Equalization Handles Tax Liens

May 25, 2026November 30, 2016 by Brotman Law

In our continuing series about tax liens, we would like to talk about how the California Board of Equalization handles them. While there are similarities between how the IRS and the various California tax agencies pursue, impose, and release tax liens, there are some important differences that every tax payer should be aware of.

Everything You Need to Know About Tax Liens, Pt. 2

May 25, 2026November 23, 2016 by Brotman Law

Everything You Need To Know About Tax Liens 2

In Part 1, you learned what a lien is, how taxpayers are notified of a lien, and what elements are required for a valid lien. In Part 2, you will read how a lien can impact your credit report, who has access to a list of those with liens, and what happens during bankruptcy and other financial events if a lien is involved.

Everything You Need to Know About Tax Liens, Pt. 1

May 25, 2026November 16, 2016 by Brotman Law

The tax community is a house somewhat divided over the effectiveness of liens. On the one hand, the government needs to protect their interests in regards to taxes owed them. On the other hand, tax liens are filed against taxpayers with few or no assets to file a lien against.

California Tax Guide for Marijuana Businesses and Proposition 64: The Adult Use of Marijuana Act

May 25, 2026November 16, 2016 by Brotman Law

Key Takeaways

1. Marijuana related businesses and dispensaries typically deal with large amounts of cash because of the limitations associated with the federal banking system and marijuana business.
2. We anticipate a heightened risk of audit is because this is a “new” industry for the Board of Equalization and there’s not a lot of statistical data associated with marijuana businesses.

On Tuesday, California voters passed historic legislation by voting to allow the recreational use of marijuana in California. Regardless of your opinion about marijuana use, the legislation will have a huge impact on the state of California and its citizens and will bring a large source of new taxable revenue into the state. Because of the complexity surrounding the tax laws surrounding the new measure, I have put together a rough guide of issues for marijuana businesses and California citizens to be aware of.

What’s the Difference Between a Tax Lien and a Tax Levy?

May 25, 2026November 9, 2016 by Brotman Law

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Key Takeaways

Aside from these differences, liens and levies are remarkably similar in most other respects.
Liens and levies are filed by the federal and state tax authorities when you neglect or refuse to pay a tax bill you have received from these agencies.
The IRS usually files liens with the county recorder or the clerk of courts in your county of residence or where your property is located. A lien filed by the FTB is against any property you own in California.

Taxpayers often confuse the terms tax lien and tax levy and do not understand the difference in actions represented by these concepts. While liens and levies can both be filed by the IRS and the California Franchise Tax Board (FTB) and there are many similarities to when they are issued and how they can be removed, liens and levies are terms for very different actions.

What Happens When You Miss Your Tax Extension Deadline?

May 25, 2026October 26, 2016 by Brotman Law

Key Takeaways

As long as you did so by October 17, you will be allowed to file electronically.
The consequences of not filing your state or federal income tax return extension or payment are more interest accrued and additional penalties.
If you owe either of these penalties, pay the failure-to-file penalty first as it is the more substantial or the two. Failure to file is assessed at 5% of the taxes not paid by the due date for each month or partial month the return is late.

October 17, 2016, was the last day you can file California State or Federal income tax returns if you were granted the six-month extension in April. It is not the time to panic, but it is definitely time to move quickly if you have not completed your 2015 tax return and payment.

As long as you did so by October 17, you will be allowed to file electronically. However, if you are planning to file an amended return, you must mail it; neither the state nor the IRS allows electronic filing of amended returns.

Keep in mind that any unpaid taxes from 2015 have been accruing penalties and interest since April 18, 2016. You cannot file for another extension; you must file a return.

What Happens If You Misclassified a Worker?

May 25, 2026October 19, 2016 by Brotman Law

Key Takeaways

What does the employment classification of workers have to do with payroll tax audits.
Previously, we have posted about the difference between employees and independent contractors in the eyes of the IRS and the EDD. Here is a quick reminder.
There is an entire list of factors the EDD (and the IRS) use to determine whether or not someone is an employee. No single factor can be used to make the determination.

What does the employment classification of workers have to do with payroll tax audits?

Everything.

When the Employment Development Department of the State of California decides to audit, the classification of your workers is the auditor’s sole concern. Additionally, the IRS often adopts the results of the EDD audit to use in assessing federal penalties.

For this reason, it is critical to classify your workers properly and supply only the information the auditor asks for, nothing more.

What Are Your Payroll Tax Responsibilities?

May 25, 2026October 12, 2016 by Brotman Law

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Key Takeaways

Such employers see this as a cost-saving for their businesses because they not only do not have to pay taxes, they do not have to pay for someone to administer employee taxes.
Social Security and Medicare, otherwise known as FICA, is paid quarterly. FUTA, the federal unemployment tax act, requires an annual return. Employers are required to provide an IRS Form W-2 detailing the wage withholdings.
Very small employers, defined as those with an estimated tax liability of $1,000 or less for a calendar year can file annually.

In a previous post, we talked about the difference between independent contractors and employees. One of the biggest differences, and one that often drives intentional worker misclassification, is that employers must withhold and pay payroll taxes for employees whereas they do not for independent contractors.