CDTFA Collections: The State Tax Lien, the Notice of Levy, the Till Tap, and How to Stop Them

A collection letter from the California Department of Tax and Fee Administration (CDTFA), whether it is the demand for payment, a Notice of State Tax Lien or a Notice of Levy, means a sales tax balance has become final, and the deadline that matters is the date on the demand, because once it passes the CDTFA can record the lien, take the bank account and send a collector to the register without asking a court first. Each one is stopped a different way, and the order you do things in decides whether the money comes back. This page covers the letters; our California tax collection attorney page describes the engagement.

What a CDTFA collection letter is and why you received one

The demand for payment says a sales or use tax balance is final and due, and it arrives for one of three reasons: returns were filed without payment, a Notice of Determination from an audit went 30 days without a petition for redetermination, or a payment plan was broken. Under section 6757 of the Revenue and Taxation Code the balance became a state tax lien by law when it became due and payable. A Notice of State Tax Lien is recorded with the county recorder and filed with the Secretary of State, and it attaches to everything the debtor owns in California. A Notice of Levy goes to a bank, a card processor or a customer who owes you money and orders the holder to send the CDTFA what it has, up to the balance on the notice; an order to withhold freezes the money instead. A CDTFA warrant, with the force of a writ of execution, sends a collector for the cash in the register (the till tap) or places a keeper in the store to take every cash sale.

The deadline on a CDTFA demand for payment and what happens if nothing is done

The deadline is the date on the demand for payment, and if nothing is done by then the collection cost recovery fee is added under section 6833 of the Revenue and Taxation Code, the account goes to a collector, and the lien, the levy and the till tap follow in roughly that order. The fee is a flat amount the CDTFA sets each year, on top of monthly interest and the 10 percent penalty section 6565 adds to a determination that becomes final unpaid. A balance that goes quiet reaches other places too: the seller’s permit can be revoked, a balance over $100,000 can land on the CDTFA’s published list of the largest delinquent accounts, and if the business closes, section 6829 lets the CDTFA assess the unpaid tax against the people who ran it.

How engagements work

Many matters like this one run as a monthly flat-fee engagement: one number, agreed up front, that covers the work — agency contact, deadlines, document responses, strategy — until the matter resolves. Shorter, well-defined projects are often a one-time flat fee instead, and some matters genuinely fit hourly billing better. We will tell you which you are looking at on the first call, before you commit to anything. If you want the details first, see how we price our work.

Which CDTFA letter do you have, and has the levy already hit?

Tell us where things stand. We respond to new inquiries within one business day.

What to do in the first 30 days

The first 30 days are for finding out what the balance is made of, filing every return, and getting a proposal to the collector before the levy is served or, if it has been, before the bank sends the money. In order:

Read the letter for the periods and the source, unpaid returns, a final determination or a broken plan, and match each period to what you filed and paid; a determination still inside its 30-day window is petitioned, not paid.
File every missing return, including a zero return for a period with no sales; no plan, hold or offer is considered while a return is missing.
Call the collector on the letter and say what you can pay now and monthly; a call before the levy gets better terms than one after it.
If a levy has been served, put the proposal in writing that day, with a financial statement, and ask for a release or a partial release to cover payroll.
Keep current returns filed and paid on time; the CDTFA rarely approves a plan or releases a levy for an account that keeps falling behind.

Your options for a CDTFA balance in collection

A CDTFA balance in collection is resolved one of five ways, depending on whether the business is still open, how large the balance is, and whether the number is right.

Pay in full. Through the CDTFA online account or by check; a recorded lien is released after payment.
Installment payment agreement. Monthly payments on the full balance, with current returns filed and paid on time while it runs; the district office sets the terms. It stops levies and till taps, but a lien can still be recorded, and a missed payment or a late return defaults it.
Hardship. Where a financial statement shows there is nothing to collect right now, the CDTFA can hold collection and release a levy in whole or in part; a levy that threatens the health or welfare of the taxpayer’s family is released on that ground.
Offer in compromise. A settlement of a final balance for less than what is owed, based on what the CDTFA could collect from you, and generally reserved for a business that has stopped operating; it takes months and is not a stay on collection while it is pending.
Contest the number. A final balance that is wrong can still be recovered after payment through a claim for refund.

What Brotman Law does with a CDTFA collection letter

For a collection letter our work in the first thirty days is to stop the money from leaving, in the order that gets it released fastest, and then to put the balance on terms the business can carry. The first step is the CDTFA power of attorney, form CDTFA-392, so the collector deals with us and we can pull the account. Where the balance came out of an audit, we check whether the determination is final or still open to a petition, which is work for our CDTFA audit attorney page. Then the sequence: missing returns filed the same week; a financial statement built from three months of bank statements and the sales run rate; a proposal to the collector, a down payment and a monthly figure the numbers support, with the levy release request in the same letter. If the collector says no, the request goes to the supervisor and then to the Taxpayers’ Rights Advocate Office with the hardship case laid out: a levy that closes the business collects nothing after this month; a plan collects the balance and the current tax.

Do you need a lawyer for a CDTFA collection letter?

Not always: a balance under roughly $50,000 with no lien recorded, no levy served, no permit problem and no one looking at you personally is a payment plan you can set up with the CDTFA yourself, and this page has told you how. We would rather say so on the free 15-minute call than sign you up for work you do not need.

Our monthly engagement fits when a levy has hit or a keeper is in the store, when a lien is blocking a sale or a refinance, when the balance is larger or came from an audit that was never contested, or when the business has closed and the CDTFA is looking at the owners under section 6829.

How the monthly flat fee works for a CDTFA collection letter

Many matters like this one run as a monthly flat-fee engagement: one number, agreed up front, that covers agency contact, deadlines, document responses and strategy until the matter resolves. It does not include an offer in compromise, a petition or claim for refund on the audit behind the balance, or a responsible person defense, each scoped and priced on its own. The engagement ends when the levy is released, the returns are current and the balance is paid or on a plan that is holding.

Documents to gather

Six items answer nearly every question a CDTFA collection letter raises.

Every CDTFA letter from the past year, with envelopes.
The returns filed for the periods on the letter, and a list of what is unfiled.
Proof of every payment to the CDTFA, including any bank levy already taken.
Three months of business bank statements and the merchant processor statements.
A list of what the business owns and owes: equipment, vehicles, inventory, receivables and loans.
The entity documents and the names of whoever signs checks and returns.

Can the CDTFA levy my bank account without going to court?

Yes. A Notice of Levy is served by the CDTFA directly on the bank, and no court order is needed. The bank holds the funds for a short period before sending them, and a release negotiated in that window keeps the money in the account.

How do I get a CDTFA levy released?

Put a proposal in front of the collector before the bank sends the money: the missing returns filed, a financial statement, and a down payment with a monthly plan the numbers support, in a written request for release. A partial release to cover payroll is often available when a full one is not, and the supervisor and the Taxpayers’ Rights Advocate Office can review a refusal.

Does a Notice of State Tax Lien stop me from selling or refinancing property?

It does not stop the sale, but the lien has to be paid or released out of escrow before it closes. A title company or a lender will find it in the public record, and the CDTFA issues a release or a partial release once its share of the proceeds is arranged. A recorded lien lasts ten years and can be extended.

What is a CDTFA till tap, and what does a keeper do?

A till tap is a single visit in which a collector, acting under a CDTFA warrant, takes the cash in the register; a keeper is a collector or a sheriff’s deputy stationed in the business for a set period who takes every cash sale as it is made. Both end with a payment or a signed plan on the day.

Can the CDTFA collect the business’s sales tax from me personally?

Yes, once the business has stopped operating, if you were responsible for its tax matters, the failure to pay was willful, and the tax was collected from customers and not sent in. That is section 6829 of the Revenue and Taxation Code, served as a dual determination letter with its own 30-day petition deadline; our responsible person liability page covers the defenses.

Can I get an offer in compromise from the CDTFA while the business is still open?

Only in narrower cases: the CDTFA’s offer program is built for businesses that have stopped operating, and an operating business is considered when the balance did not come from tax collected from customers and never paid over. The offer has to reflect what the CDTFA could collect from your assets and income.

The other pages in the CDTFA collections series:

Talk to us

Brotman Law is in San Diego and was founded in 2013. We represent clients anywhere in the country before the CDTFA, and we have resolved 2,200+ matters along the way. The first step is a free 15-minute call with our intake team. From there, the next step is a strategy session with the attorney; if it has no value to you, it is refunded. Book a free 15-minute call.

Sam Brotman, JD, LLM, MBA. Last reviewed September 2026.