Legal Question in Tax Law in California

Re: old back tax collection

While there are statutory limitations periods on

tax collections, in pratical terms, the time period

is endless. The old saying about the only thing

you can be sure of in life is "death and taxes"

is true. The time periods you mention here are

nothing unusual or extraordinary, at least in

my opinion after over 20 years of tax practice.

You can feel free to contact us if you so desire.

Re: old back tax collection

Here's what you need to know about the statute of limitations on the collection of California state income taxes:

First, Sec. 19371 of the Revenue and Taxation Code provides that the State has 10 years, or the period during which a lien is in effect, to collect state taxes:

Sec. 19371. Authority to sue; limitation of actions. At any time within 10 years after the determination of liability for any tax, penalties, and interest, or within the period during which a lien is in force as the result of the recording of an abstract under Section 19203 or of the recording or filing of a notice of state tax lien under Section 7171 of the Government Code, the Franchise Tax Board may bring an action in the courts of this state, of any other state, or of the United States in the name of the people of the State of California to recover the amount of any taxes, penalties, and interest due and unpaid under Part 10 (commencing with Section 17001), Part 11 (commencing with Section 23001), or this part.

Next, Sec. 7172 of the Government Code provides that a lien is valid for 10 years unless it is recorded, in which case it lasts for another 10 years, plus an optional 10 year renewal period after that!

Sec. 7172. (a) A state tax lien continues in effect for 10 years from the date of its creation unless it is sooner released or otherwise discharged, and is extinguished 10 years from the date of its creation unless a notice of state tax lien is recorded or filed as provided in Section 7171. (b) When a notice of a state tax lien is recorded or filed as provided in Section 7171 before the lien is extinguished pursuant to subdivision (a), the lien continues in effect for 10 years from the date of recording or filing the notice of state tax lien unless it is sooner released or otherwise discharged, and is extinguished 10 years from the date of recording or filing the notice of state tax lien unless it is extended as provided in subdivision (c). (c) A state tax lien may, within 10 years of the date of the recording or filing of the notice of state tax lien or within 10 years of the date of the last extension of the lien, be extended by recording in the office of the county recorder of any county or filing with the Secretary of State a new notice of state tax lien as provided in Section 7171, and from the time of such recording or filing the lien is extended for 10 years unless sooner released or otherwise discharged.

The bottom line is that the State has a long, long time to collect, and is by no means out of luck after the initial ten year period, as long as it has taken the simple step of recording its lien.

You can get more information on California laws and regulations at www.leginfo.ca.gov/calaw.html

I hope this is helpful to you.