California's State Tax Lien

Friday, February 09, 2007

In accordance with the California Unemployment Insurance Code Section 1703, employers or general public who fail to pay taxes due to the Employment Development Department (EDD) is subject to an enforceable tax lien that includes taxes due, penalty, interests, and juridical costs.

The Employment Development Department is the authorized entity to file and record a Notice of State Tax Lien in association with the office of the Secretary of State. The EDD also specifies the total amount of contributions, penalties, interest, and cost that is due the Department.

In California, there are specific times in which amounts due have to be paid before taking over the property of a delinquent taxpayer. Such dates are divided into three different stages:

- First comes the date for the amounts disclosed on a return that is received by the EDD for penalties, including the date when the notice was sent to the taxpayer of the amount he or she owes.

- The second stage includes amounts reestablished under the provisions of Section 1875, and should state clearly the date of a written notice of rescission, if any.

- Finally, another time frame is set for any other amount left, including the date in which the assessment is final.

Once that California's Employment Development Department has fulfilled this process, the recording or a Notice of State Tax Lien takes place within 10 years of the date after the lien has arisen, keeping in mind that such record is valid for ten years and can be extended in ten-year increments.

Like in other states in the United States, a Notice of State Tax Lien becomes a public notice to the delinquent taxpayer's creditors that might hinder any action over a property. Taxpayers could pay the liability in full to avoid a recording of a Notice of State Tax Lien and repossessing of their properties, negotiate with the EDD when the taxpayer is unable to pay in full the taxes and cost due.

People facing this problem should contact the California's Employment Development Department immediately by dialing the number that is included in the Notice of Lien. Remember that a copy of the Notice of State Tax Lien is mailed to the taxpayer’s address in accordance with the personal information available at the Department’s records.

Any questions regarding a California State Tax Lien can be answered at the Employment Tax Call Center, phone 1-888-745-3886, or directly at the local Employment Tax Office (ETO). To pay State Tax Liens in full you can contact The Employment Development Department, P.O. Box 826203, MIC 92 G, Sacramento, CA 94230-6203, fax: (916) 464-2711.