FTB Hardship Status – Petition for Temporary Deferral from FTB Collections
While every Franchise Tax Board tax debt collection case is unique, sometimes the best option is to negotiate for a temporary deferral from FTB (Franchise Tax Board) collections. This type of tax resolution is useful because the client is protected from earnings withholding orders and other actions the FTB can use to collect a tax debt from you.
Qualifying for FTB hardship status requires a detailed financial disclosure demonstrating that collection efforts would create significant economic hardship. The Franchise Tax Board will typically request documentation outlining your income, expenses, assets, and liabilities before agreeing to temporarily suspend collection activity. Simply stating that you cannot afford to pay is not enough—your financial condition must clearly support the request.
A properly prepared hardship petition can pause aggressive enforcement actions such as bank levies or additional wage garnishments while your financial situation stabilizes. However, interest and penalties generally continue to accrue during the deferral period, which is why strategic planning is essential. Temporary relief should be viewed as part of a broader resolution plan, not a permanent solution.
Our firm evaluates whether an FTB collection deferral is appropriate based on your overall financial landscape and long-term goals. In some cases, a temporary deferral can create the breathing room necessary to secure employment, resolve cash flow issues, or prepare for a more permanent resolution, such as an installment agreement or offer in compromise. Careful preparation and negotiation are critical to maximizing your protection during this period.
The hardship status that can be negotiated with the FTB is temporary, and the extension will not last longer than one year, so it’s important to have a tax strategy for your long-term tax resolution negotiations when considering this option. For many people fighting the FTB, this option is practical if they are unable to afford monthly payments on their debt, or just need time before they can make payments or fund an offer in compromise tax settlement. If this sounds like it applies to your situation, contact us and we can help you.