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STATE TAX LIENS

04/24/2010 . STATE TAX LIENS. LIEN PROGRAM. Lien Resolution Unit Brenda Sizer, Lien Specialist (916) 845-7086. AGENDA. Introductions Purpose General Information State Tax Liens. INTRODUCTIONS. Speaker introductions Business cards Handouts Questions & Answers. PURPOSE.

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STATE TAX LIENS

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  1. 04/24/2010 STATE TAX LIENS LIEN PROGRAM Lien Resolution Unit Brenda Sizer, Lien Specialist (916) 845-7086

  2. AGENDA • Introductions • Purpose • General Information • State Tax Liens

  3. INTRODUCTIONS • Speaker introductions • Business cards • Handouts • Questions & Answers

  4. PURPOSE • Share information regarding FTB’s State Tax Lien program • Establish and maintain open communication • Answer questions regarding our program

  5. GENERAL CONTACT INFORMATION FTB Lien Group:General Questions – 916 - 845 - 4350 Demand Requests – Use e>Demand http://www.ftb.ca.gov Fax – 916 - 845 - 4389 Other Tax Agencies: Board of Equalization: 916 - 445-1122 Employment Development Department: 916-464-2669 IRS Centralized Lien Processing Center: 800-913-6050

  6. STATE TAX LIENS (STL) WHAT IS A LIEN? • A lien is a legal claim for a debt owed WHAT IS A STATE TAX LIEN? • A state tax lien is a general lien • It arises out of operation of law (R&TC 19221) • Attaches to all property and rights to property, whether real or personal, belonging to the Taxpayer and located in California • Referred to as a “statutory lien or secret lien”

  7. NOTICE OF STATE TAX LIEN (NSTL) • Once recorded, the lien becomes a matter of public record • Attaches to real property located within the county where Notice was recorded • Remains in effect for ten years unless extended

  8. DEMAND REQUESTS To obtain a lien release, the liened liability must be resolved. Submit your payoff request through e>Demand, FTB’s online Demand Request application: www.ftb.ca.gov Type eDemand in the search field or Fax: 916-845-4389

  9. DEMAND REQUESTS E>Demand requires all the necessary information to process your request: • Contact Information: Company name, contact person, address, phone number, and fax number of person requesting payoff • Client’s Information: Full Name, SSN, Current Address, Property Address • Lien Information: FTB Lien Certificate Number, Name on Lien, SSN on Lien **You can submit up to ten lien certificate numbers in your Demand Request**

  10. LIEN PRIORITY Determining priority between • FTB Lien and other judgment creditors • Exemption: Purchase money • Competing state tax liens or a state tax lien and federal lien

  11. REFERENCES • Notice of State Tax Lien (IRC 6323 & GC 7171) • Statutory lien (secret lien) (IRC 6321 & RTC 19221) • Competing state tax liens or state tax lien and federal lien (GC 7170.5) • Purchase money has priority (CC 2898)

  12. ORDER TO WITHHOLD (OTW) • What is an OTW? • Why is an OTW issued? • What responsibility do I have to honor the OTW? • What if there are insufficient funds to satisfy the OTW? • What priority does the OTW have?

  13. ORDER TO WITHHOLD (OTW) • What is an OTW? • An OTW is a legal order that requires you to withhold any funds held in your possession belonging to the debtor. • Why is an OTW Issue? • An OTW is issued when a debtor owes the FTB for liabilities not secured by a State Tax Lien.

  14. ORDER TO WITHHOLD (OTW) • What responsibility do I have to honor the OTW? • Failure to withhold and remit the amount held in your possession may make you liable for the amount of the order (RT&C 18672). • What if there are insufficient funds to satisfy the OTW? • You are only required to withhold and remit the amount in your possession belonging to the debtor. This may be less than the amount of the order.

  15. ORDER TO WITHHOLD (OTW) • What priority does the OTW have? • The OTW has priority over any debt not secured by a lien holder.

  16. PAYMENTS • Always include copy of demand notice or OTW • Place Debtors Name and SSN on face of remittance

  17. PARTIAL RELEASE AND SUBORDINATION OF LIEN • What are they? • A partial lien release will release a specific piece of property from the lien. • A lien subordination permits another lien to take priority over FTB’s lien even though the other lien may not otherwise have priority.

  18. PARTIAL RELEASE AND SUBORDINATION OF LIEN When should either be considered? • Partial release • During the transfer of property, if there are insufficient funds to satisfy our lien • Subordination of lien • When refinancing loan and insufficient equity to satisfy the lien • When modifying a loan • When taking out a second mortgage to satisfy a higher priority lien

  19. PARTIAL RELEASE AND SUBORDINATION OF LIEN • How do you apply? • To request a partial release or subordination of lien, call the FTB Lien Group at 916-845-4350. If it is determined that either is warranted, you will need to include the following with your written request:

  20. PARTIAL RELEASE AND SUBORDINATION OF LIEN How do you apply (cont’d)? • Letter of explanation • Estimated closing statement • Current title report • Appraisal • Documentation to substantiate payoff of lien holders • Copy of new Deed of Trust (Subordinations only)

  21. PARTIAL RELEASE AND SUBORDINATION OF LIEN How are they evaluated? • Some of the key items reviewed during the evaluation process include: • Verification of fair market value of property • Excessive charges for repair • Excessive fees and commission charges • Verification that payments are only made to priority lien-holders

  22. PARTIAL RELEASE >SHORT SALE • Request and Review Process is the same as any other partial lien release request • Helpful items to expedite the review process • Short Sale Agreement from lender • Estimated closing date • Notice of Default/Foreclosure Notice (if applicable)

  23. WHAT’S NEW? • Effective 2/9/07 FTB began masking the first 5-digits of the SSN on recordable lien documents. Example: XXX-XX-0000

  24. WHAT’S IN THE FUTURE? • Expansion of electronic liens • Title Exclusion Letter

  25. WHAT’S IN THE FUTURE? • Title Exclusion Letter

  26. QUESTIONS???

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