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FTB to Hold Interested Party Meeting Concerning Its Financial Institution Program that Identifies Accounts of Delinquent Tax Debtors.

On Behalf of | Mar 12, 2013 | FTB, Tax Debt |

The Franchise Tax Board (FTB) is having a public hearing regarding its Financial Institution Records Match (FIRM), one of its most important tools in the collection of delinquent tax liabilities. The hearing is scheduled for 1:00 p.m., on Wednesday, March 27, 2013, at the Franchise Tax Board, 9646 Butterfield Way, Town Center, Valley Quail Room, Sacramento, California. The hearing will allow interested parties to weigh in on the FTB’s administration of FIRM, an enforcement tool used to collect delinquent taxes and non-tax debts of individuals and business entities.

The FTB operates and administers FIRM that utilizes automated data exchanges to the maximum extent feasible to identify accounts of delinquent tax debtors held at financial institutions, as defined under R&TC Section 19266 (h)(2), doing business in California.

Under Section 19266, the FTB is authorized to implement a quarterly data match process to match specified debtor data against accountholder information of financial institutions doing business in California.

Specifically, Section 19266 requires the FTB to promulgate rules or regulations necessary to implement the provisions of this new law, including the following:

• A structure by which financial institutions shall receive from the Franchise Tax Board the delinquent debtor files to match against its own list of account holders.

• An optional structure by which financial institutions without the technical ability to process the data exchange may forward a list of their account holders to the Franchise Tax Board, and then the Franchise Tax Board will match that list against the delinquent debtor files.

• Authority for the Franchise Tax Board to temporarily exempt a financial institution from FIRM participation if the Franchise Tax Board determines that the financial institution’s participation would not generate sufficient revenue to be cost effective.

• A process by which financial institutions may be temporarily suspended from FIRM participation if the financial institution is undercapitalized, significantly undercapitalized, or critically undercapitalized as defined by Federal Deposit Insurance Corporation regulations or National Credit Union Administration regulations.

Any financial institution that willfully fails to comply with the rules and regulations openly declared by FTB for the administration of delinquent tax collections, unless it is shown to our satisfaction that the failure is due to reasonable cause, shall be assessed a penalty upon notice and demand, and collected in the same manner as tax. The penalty imposed under Section 19266 shall be in an amount equal to $50 for each record not provided, but the total imposed on that financial institution for all such failures during any calendar year shall not exceed $100,000.

Click here to read more about the interested party hearing.

Click here to read more about the FTB’s FIRM program.


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