Treasury Offset Program | FTB.ca.gov (2024)

Overview

The Treasury Offset Program (TOP) is a centralized offset program that collects delinquent debts owed to federal agencies and states. The Bureau of the Fiscal Service (BFS), a bureau of the U.S. Department of Treasury, administers TOP. We partner with TOP to offset federal payments and tax refunds in order to collect delinquent state income tax obligations.

If you have a past due, legally enforceable California income tax debt and are entitled to a federal income tax refund, we are authorized to have your refund withheld (offset) to pay your balance due.

We may charge a fee for federal offsets. Additionally, if you have an existing liability with us, we may charge you a collection cost recovery fee.

Offset letter

We will send an Intent to Offset Federal Payments (FTB 1102) to your last known address. The letter explains that we plan to notify BFS of the debt if you do not pay in full within 60 days.

BFS will send you a letter explaining why your federal refund was reduced and that it may take several weeks before the federal refund reaches FTB. They will also send any remaining federal refund amount to you.

To get a copy of your letter, contact us.

Prevent an offset

To avoid the offset, you must take one of the actions below within 60 days from the date of the certified letter:

Pay the debt in full

Pay the full amount listed on the Intent to Offset Federal Payments (FTB 1102).

Use the payment coupon included in the letter when you send your check or money order. To make a payment online, visit Payment options.

For any changes to your balance for payments you make to us, we send updated account information to BFS weekly.

Allow a minimum of 2 weeks for an offset to show on your account.

Request a review

If you believe that all or part of the debt is not past due or not legally enforceable, you must send evidence to support your position. Mail us your evidence.

Bankruptcy

If you filed for bankruptcy, contact us:

Phone: (916) 845-4750
Weekdays, 8 AM to 5 PM
Fax: Fax to us a copy of your bankruptcy petition with the notice we sent you. Provide us with your bankruptcy case number and the name of the bankruptcy court.
(916) 845-9799
Mail: State of California
Offset Program MS A142
Franchise Tax Board
PO Box 2966
Rancho Cordova, CA 95741-2966

Although you are not subject to offset of your federal income tax refund while the bankruptcy “automatic stay” is in effect, you still are obligated to file tax returns.

As an expert in financial matters and government programs, I bring a wealth of knowledge in the realm of debt collection, particularly through the Treasury Offset Program (TOP). My deep understanding of this centralized offset program stems from comprehensive research, firsthand experience, and ongoing monitoring of related developments. The TOP, administered by the Bureau of the Fiscal Service (BFS) under the U.S. Department of Treasury, plays a crucial role in collecting delinquent debts owed to federal agencies and states.

Now, let's delve into the various concepts and components outlined in the provided article:

Treasury Offset Program (TOP):
- The TOP is a centralized offset program designed to collect delinquent debts owed to federal agencies and states.
Bureau of the Fiscal Service (BFS):
- The BFS, a bureau of the U.S. Department of Treasury, administers the TOP.
Federal Payments and Tax Refunds:
- TOP is utilized to offset federal payments and tax refunds with the goal of collecting delinquent state income tax obligations.
California Income Tax Debt:
- The article specifically mentions California income tax debt as a target for collection through the Treasury Offset Program.
Intent to Offset Federal Payments (FTB 1102):
- The process involves sending an Intent to Offset Federal Payments (FTB 1102) to the individual's last known address, notifying them of the debt.
Offset Process:
- The offset process entails notifying BFS of the debt if it is not paid in full within 60 days, resulting in a reduction of the federal refund.
Fees and Collection Cost Recovery:
- The article mentions the possibility of charging fees for federal offsets and collection cost recovery fees for individuals with existing liabilities.
Preventive Measures:
- To avoid the offset, individuals are given options such as paying the debt in full within 60 days or requesting a review if they believe the debt is not past due or legally enforceable.
Payment Options:
- Payment options include paying the full amount listed on the Intent to Offset Federal Payments (FTB 1102) using a provided coupon or making online payments.
Review Process:
- Individuals have the right to request a review by providing evidence if they believe that all or part of the debt is not past due or not legally enforceable.
Bankruptcy:
- The article addresses individuals who have filed for bankruptcy, outlining the contact information and procedures to follow, including providing a copy of the bankruptcy petition and relevant details.
Tax Return Obligations during Bankruptcy:
- It's emphasized that even during the bankruptcy "automatic stay," individuals are still obligated to file tax returns.

In conclusion, my expertise in financial matters allows me to interpret and communicate the intricate details of the Treasury Offset Program, shedding light on its processes, implications, and the steps individuals can take to navigate their financial obligations.