Code Section Group

Revenue and Taxation Code - RTC

DIVISION 2. OTHER TAXES [6001 - 61045]

  ( Heading of Division 2 amended by Stats. 1968, Ch. 279. )

PART 10.2. ADMINISTRATION OF FRANCHISE AND INCOME TAX LAWS [18401 - 19802]

  ( Part 10.2 added by Stats. 1993, Ch. 31, Sec. 26. )

CHAPTER 5. Collection of Tax [19201 - 19291]

  ( Chapter 5 added by Stats. 1993, Ch. 31, Sec. 26. )

ARTICLE 2. Lien of Tax [19221 - 19226]
  ( Article 2 added by Stats. 1993, Ch. 31, Sec. 26. )

19221.
  

(a) If any taxpayer or person fails to pay any liability imposed under Part 10 (commencing with Section 17001) or Part 11 (commencing with Section 23001) at the time that it becomes due and payable, the amount thereof, (including any interest, additional amount, addition to tax, or penalty, together with any costs that may accrue in addition thereto) shall thereupon be a perfected and enforceable state tax lien. This lien is subject to Chapter 14 (commencing with Section 7150) of Division 7 of Title 1 of the Government Code.

(b) For the purpose of this section, amounts are “due and payable” on the following dates:

(1) For amounts of any liability disclosed on a return filed on or before the date payment is due (with regard to any extension of time to pay), the date the amount is established on the records of the Franchise Tax Board, except that in no case will it be prior to the day after the payment due date;

(2) For amounts of any liability disclosed on a return filed after the date payment is due (with regard to any extension of time to pay), the date the amount is established on the records of the Franchise Tax Board;

(3) For amounts of any liability determined under Section 19081 or 19082 (pertaining to jeopardy assessments), the date the notice of the Franchise Tax Board’s finding is mailed or issued;

(4) For all other amounts of liability, the date the assessment is final.

(c) Notwithstanding subdivision (a), during any period that Section 362 of Title 11 of the United States Code applies, any tax lien that would otherwise attach to property by reason of subdivision (a) shall not take effect, unless the tax is a debt of the debtor that will not be discharged in the bankruptcy proceeding and the property or its proceeds are transferred out of the bankruptcy estate to, or otherwise revested in, the debtor.

(Amended by Stats. 1995, Ch. 69, Sec. 1. Effective January 1, 1996.)

19222.
  

For the purposes of this section, if any certified, treasurer's, or cashier’s check (or other guaranteed draft), or any money order received in payment of any liability imposed under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part is not duly paid, the state shall, in addition to its right to exact payment from the party originally indebted therefor, have a perfected and enforceable state tax lien for the amount of that check (or draft) upon all the assets of the financial institution on which drawn or for the amount of that money order upon all the assets of the issuer thereof. The lien referred to in the preceding sentence shall be subject to Chapter 14 (commencing with Section 7150) of Division 7 of Title 1 of the Government Code.

(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)

19223.
  

Upon recordation or filing of a notice of state tax lien pursuant to Section 7171 of the Government Code by the Franchise Tax Board for any taxes due from the grantor of a trust on income of the trust which is taxable to the grantor under Part 10 (commencing with Section 17001), and upon its giving notice of the recording or filing pursuant to Section 7171 of the Government Code to the fiduciary of the trust, or in case there is more than one fiduciary to any one of the fiduciaries, the amount of the taxes constitutes a lien upon all the real or personal property of the trust in the county owned by the trust or afterwards and before the lien expires acquired by the trust. The lien has the force, effect, and priority of a lien created pursuant to Section 19221.

(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)

19224.
  

The notice required to be given by Section 19223 may be served upon the fiduciary personally, or by mail; if by mail, service shall be made pursuant to Section 1013 of the Code of Civil Procedure and shall be addressed to the fiduciary at his or her address as it appears in the records of the Franchise Tax Board.

(Added by Stats. 1993, Ch. 31, Sec. 26. Effective June 16, 1993. Operative January 1, 1994, by Sec. 83 of Ch. 31.)

19225.
  

(a) (1) The Franchise Tax Board shall notify in writing the person described in Section 19221 of the filing or recording of a notice of state tax lien as provided under Chapter 14 (commencing with Section 7150) or Chapter 14.5 (commencing with Section 7220) of Division 7 of Title 1 of the Government Code.

(2) The notice required under paragraph (1) shall be mailed in accordance with Section 2885 of the Civil Code no less than five business days after the day of the filing of the notice of lien.

(3) The notice shall specify, in simple and nontechnical terms, all of the following:

(A) The amount of unpaid tax.

(B) The right of the person to request a review during the 15-day period beginning on the day after the five-day period described in paragraph (2).

(C) The independent departmental administrative review available to the taxpayer with respect to the lien and the procedures to obtain that review.

(D) The procedures relating to the release of liens on property.

(b) (1) The Taxpayers’ Rights Advocate shall establish procedures for an independent departmental administrative review requested under subparagraph (C) of paragraph (3) of subdivision (a).

(2) A person shall be entitled to only one review under this section with respect to the taxable period to which the unpaid tax specified in subparagraph (A) of paragraph (3) of subdivision (a) relates.

(3) An independent departmental administrative review under this subdivision shall be conducted by an officer or employee, or officers or employees, who have had no prior involvement with respect to the unpaid tax specified in subparagraph (A) of paragraph (3) of subdivision (a) before the first review under this section or Section 21015.5. A taxpayer may waive the requirement of this paragraph. Administrative review under this paragraph is not subject to Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 of the Government Code.

(4) To the extent practicable, a review under this section shall be held in conjunction with a review under Section 21015.5.

(c) For purposes of this section, subdivision (c) of Section 21015.5 shall apply.

(d) This section is operative for any collection action initiated after the date which is 180 days after the effective date of the act adding this section.

(Added by Stats. 1999, Ch. 348, Sec. 1. Effective January 1, 2000. Applicable as provided in subd. (d).)

19226.
  

(a) At the request of the owner whose property is subject to any lien under Section 19221, the Franchise Tax Board shall issue a release of lien from that property if the owner is not the person whose unsatisfied liability gave rise to the lien and the owner does either of the following:

(1) Deposits with the Franchise Tax Board an amount of money equal to the value of the interest of the state (as determined by the Franchise Tax Board) in the property.

(2) Furnishes a bond acceptable to the Franchise Tax Board in a like amount.

(b) The Franchise Tax Board shall refund the amount so deposited, pay interest at the overpayment rate under Section 19521, and release the bond, to the extent the Franchise Tax Board determines that either of the following apply:

(1) The unsatisfied liability giving rise to the lien can be satisfied from a source other than the property for which the deposit or bond is made.

(2) The value of the interest of the state in the property is less than the Franchise Tax Board’s prior determination of the value.

(c) If no request is made under subdivision (d), within the period prescribed, the Franchise Tax Board shall do both of the following within 60 days after the expiration of the period:

(1) Apply the amount deposited or collected on the bond, to the extent necessary to satisfy the unsatisfied liability secured by the lien.

(2) Refund (with interest at the overpayment rate under Section 19521) any portion of the amount deposited which is not used to satisfy the liability.

(d) If a release is issued pursuant to this section, the owner may, within 60 days after the day on which the release is issued, request the Franchise Tax Board as provided under subdivision (f) to determine whether the value of the interest of the state (if any) is less than the Franchise Tax Board’s prior determination of the value. No other action may be brought by the owner for a determination.

(e) This section shall not limit the circumstances in which the Franchise Tax Board may release a lien under any circumstances to facilitate the collection of the tax liability or, if that release is in the best interest of the taxpayer and the state, take any action associated with the release of that lien it deems appropriate.

(f) The Taxpayers’ Rights Advocate shall establish procedures for an independent departmental administrative review for requests made under subdivision (d). This administrative review shall not be subject to Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3 of the Government Code. If the administrative review determines that the Franchise Tax Board’s previous determination of the value of the interest of the state in the property for purposes of this section exceeds the actual value of the state’s interest, the board shall provide a refund of the amount deposited and a release of the bond, to the extent that the aggregate of the amounts thereof exceeds the value so determined. In the case of a refund issued pursuant to this subdivision, interest shall be allowed at the rate prescribed for overpayments from the date the Franchise Tax Board receives the amount to the date of refund.

(g) This section shall be operative on the effective date of the act adding this section.

(Added by Stats. 1999, Ch. 931, Sec. 21. Effective October 10, 1999.)

RTCRevenue and Taxation Code - RTC2