Tax Relief in California
California has one of the highest individual tax burdens in the country, with a top state income tax rate of 13.3% and collection enforcement by both the IRS and the Franchise Tax Board (FTB). Whether you're dealing with unfiled returns, wage garnishments, or an IRS audit, understanding your options is an important first step toward resolving tax debt.
This page is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws change frequently. Consult a qualified tax professional for advice specific to your situation.
Tax Relief Companies Serve California Residents Nationwide
You don't need a local office to get help with tax debt. Tax relief companies work with the IRS on your behalf remotely. The IRS itself handles most taxpayer communication by phone, fax, mail, and its online portal. A licensed Enrolled Agent, CPA, or tax attorney can represent you before the IRS from anywhere in the country through a Power of Attorney (Form 2848).
This means California residents have access to the same top-rated national firms regardless of where they're located in the state. Most consultations are done by phone or video, and all IRS correspondence is handled directly by your representative.
How Taxes Work in California
How California Taxes Its Residents
California uses a progressive income tax system with nine brackets, ranging from 1% up to 13.3% on income over $1 million. There is also a 1% Mental Health Services Tax surcharge on income above $1 million. This means high earners in California can face a combined federal and state marginal rate exceeding 50%. Even middle-income earners may pay state rates of 6 to 9.3%. Check the FTB website for current bracket thresholds, as these are adjusted periodically.
The Franchise Tax Board (FTB) vs. the IRS
California residents can owe tax debt to two separate agencies: the IRS (federal) and the Franchise Tax Board (state). Each has its own filing requirements, collection powers, and resolution programs. The FTB can independently garnish wages, levy bank accounts, intercept state tax refunds, and file state tax liens, even if you're current with the IRS. The FTB's collection statute is generally 20 years (compared to 10 for the IRS), though certain actions can pause or extend this period.
Common Tax Problems for Californians
High earners may face audit scrutiny from both the IRS and FTB. Self-employed workers and gig economy participants often underpay estimated taxes. Residents who sell property may face capital gains taxes at both the federal and state level. Californians who move to a no-income-tax state (like Nevada or Texas) can still face FTB audits if the state believes they haven't truly changed residency. California is known for residency audits on higher earners who claim to have left.
Resolution Options Specific to California
The FTB offers its own Offer in Compromise (OIC) program, separate from the IRS. Eligibility and approval criteria differ, so you could qualify for a federal OIC but not a state OIC, or vice versa. The FTB also offers installment agreements, voluntary disclosure programs, and hardship (non-collectible) status. Most national tax relief companies that serve California handle both IRS and FTB cases simultaneously.
Tax Relief in California: What You Need to Know
California has one of the highest state income tax rates in the U.S. at 13.3%
The FTB can garnish wages, levy bank accounts, and file state tax liens independently of the IRS
California taxpayers may owe both federal (IRS) and state (FTB) tax debt simultaneously
The FTB offers its own Offer in Compromise program separate from the IRS
California's collection statute on state tax debt is generally 20 years (compared to 10 years for the IRS), though exceptions apply
Frequently Asked Questions
Tax Relief in Other States
More states coming soon.