A client recently had his bank accounts levied for approximately $32,000. He then entered into an installment payment agreement because he has a good business that should continue to operate. The California Taxpayer’s Bill of Rights explicitly states that the Board of Equalization must give all the money taken from my client’s bank account back if he enters into an installment payment agreement:
(a) Except in any case where the board finds collection of the tax to be in jeopardy, if any property has been levied upon, the property or the proceeds from the sale of the property shall be returned to the taxpayer if the board determines any one of the following:
(1) The levy on the property was not in accordance with the law.
(2) The taxpayer has entered into and is in compliance with an installment payment agreement pursuant to Section 6832 to satisfy the tax liability for which the levy was imposed, unless that or another agreement allows for the levy.
(3) The return of the property will facilitate the collection of the tax liability or will be in the best interest of the state and the taxpayer.
(b) Property returned under paragraphs (1) and (2) of subdivision (a) is subject to the provisions of Section 7096.
However, the local office only returned about half of the money, but he needed all the money to pay his suppliers and run his business. They actually told me that they could keep the money because they are allowed to keep the money. I recited this statute to them until I was blue in the face. Technical amount of time equal to blue in the face is one hour and 12 minutes.
I got in touch with their lawyers, explained the situation and the statute. They informed the local office that they have to return the money. The remaining withheld amount was wired back into my client’s account, and he can now continue to run his business.
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