In a couple weeks the Franchise Tax Board (FTB) will be submitting its “Top 500” list to state licensing agencies, including the DMV. The FTB Top 500, if you recall, is a list of California taxpayers with the most serious state tax debts. If you make the list then you could lose your drivers license, occupational license, professional license. You may also be precluded from entering into contracts with the state.
The Top 500 now lists applicable licensing agencies, license statuses (i.e., active, canceled, disbarred) and license numbers. A good chunk of these delinquencies are for corporate taxes, and the corporate income tax chart lists officers by name.
The list is meant to increase voluntary compliance in hopes of closing California’s $10 billion tax gap. This may be an effective deterrent for individuals concerned with their image and their integrity, but how effective is the public shaming of a defunct corporation? I suspect that many of the corporate tax debts are associated with corporations that are no longer operating, and who knows how much the FTB will be able to collect on a bunch of closed corporations.