My Business Is Showing FTB Suspended. What the Heck Does That Mean?

On: July 25, 2023

Owning and running a business comes with many responsibilities. One of which is answering to the IRS and making sure to pay your taxes on time. Failure to do so can have serious consequences and lead to a business having to shut its doors.

As a business owner, you have a lot on your plate already and the last thing you want to worry about is the IRS shutting you down due to an oversight, error, or mistake. One of the best ways to protect yourself from this is to have a team of experienced IRS tax experts by your side to ensure you are always tax compliant and up to date.

What Does FTB Suspended Mean?

An innocent search of your business on the California Secretary of State’s website may end up with you noticing that your business status reads “FTB suspended.”

If you have noticed that your business status does say this, it means that the California Franchise Tax Board has suspended your business.

What Causes a Business Suspension by the FTB?

Owning a business in California means that there are certain rules, policies, and requirements that you must follow in order to remain in good standing. For instance, businesses are required to file a tax return and pay taxes. Failure to do this can result in your business being placed on suspension status by the FTB.

In addition to filing and paying taxes, businesses are required to pay any additional required fees that their business is subject to. Failure to do this, even if you comply with the other requirements, will lead to suspension by the FTB.

My Business is FTB Suspended. What Can I NOT Do?

It is important for you to make sure you comply with all the rules surrounding an FTB suspension. There are activities that you can and cannot do.

When your business is FTB suspended, you CANNOT do these things:

• File a claim for a tax refund
• Do business legally
• File your taxes with an automatic extension
• Transfer, exchange, or sell real property
• Close your business legally
• Dissolve your business
• File or continue an appeal at the Office of Tax Appeals
• Bring an action up or defend your business in court
• Maintain the right to continue to use your business name
• Maintain tax-exempt status

As you can see, an FTB suspension is serious and can deal some serious blows to your business. If you have received notice that your business is FTB suspended, it is crucial that you work with a tax professional.

Can I Get My Business Back?

Yes. You can revive your business if it has been FTB suspended. To do this, you will need to make sure that you:

• Pay any and all past-due tax balances
• File any and all past-due tax returns
• File a request to revive the business

This can be a complicated process but a tax professional can walk you through what exactly needs to be done and assist you in filing the proper paperwork.

What Happens if I Cannot Pay My Business Taxes?

If your business cannot pay its taxes, you are not just off the hook. In fact, the FTB can make you personally responsible for your business taxes in these instances:

• You have unpaid loans out to shareholders
• You removed assets from your business
• You paid excessive salaries to higher individuals in the company

Is Your Business FTB Suspended? Leading Tax Group Can Help

Learning that your business is FTB suspended can be frightening. There are rules that you must comply with and you must make sure that you take certain steps to revive your business.

Unfortunately, knowing what to do when your business has been suspended by the FTB is not common knowledge and many business owners find themselves confused and worried. Leading Tax Group is here to help. We not only understand exactly what you need to do, but we will also help you do it too. Our team is made up of seasoned tax experts who will provide you with expert Franchise Tax Board representation and get your business back in good standing.

Don’t lose your business due to an FTB suspension and call Leading Tax Group today to discuss your options.