SAN DIEGO (KGTV) — A tax mix-up led to a lot of frustration for one San Diego woman—and there are thousands of people in a similar position.
Lisa Farrar had an agreement with the Franchise Tax Board and the IRS to pay back some of the money they owed on taxes.
“In 2021, we ended up withdrawing some money from our 401k and as a result, we had a pretty large tax burden,” Farrar said.
They set up a monthly payment. “Like clockwork, the money is withdrawn from our account posted [and] everything is great,” Farrar added.
Recently, she received a letter from the FTB stating they had broken the terms of their agreement, and they would have to pay the entire balance in several days, which was more than $20,000.
“It was a pretty intimidating, threatening letter,” Farrar said.
It turns out the letter was a mistake, which the FTB admitted when ABC 10News contacted the agency.
As Farrar tried to figure out the issue, she said it caused a lot of stress and anxiety. “We were just shocked. What could be happening? Were our funds going to the wrong institution, possibly?” Farrar said.
The FTB said roughly 20,000 people in California were affected by this mix-up and admitted it was a “system error."
“Once we identified the issue, we corrected the affected taxpayers’ accounts and reset their installment agreeements,” an FTB spokesperson wrote in an email.
Farrar said the agency needs to do more to make people aware of this mistake.
“Maybe you could post this on the website [or] send letters to people so everybody knows that these letters were in error, and not to panic,” Farrar said. “It was very aggravating.”
Taxpayers can contact the FTBthrough several ways:
- Live Chat
- General Telephone at 1-800-852-5711 or Collections at 1-800-689-4776
- Visit one of the local field offices
- Or send correspondence to at: Franchise Tax Board, PO Box 942840, Sacramento CA 94240-0040
