2005 California Revenue and Taxation Code Sections 41120-41123.6 Article 2. Notice to Withhold

REVENUE AND TAXATION CODE
SECTION 41120-41123.6

41120.  If any person is delinquent in the payment of the amount
required to be paid by him or in the event a determination has been
made against him which remains unpaid, the board may, not later than
five years after the payment became delinquent, give notice thereof
personally or by first-class mail to all persons, including any
officer or department of the state or any political subdivison or
agency of the state, having in their possession or under their
control any credits or other personal property belonging to the
delinquent, or person against whom a determination has been made
which remains unpaid, or owing any debts to the delinquent or such
person.  In the case of any state officer, department or agency, the
notice shall be given to such officer, department or agency prior to
the time it presents the claim of the delinquent to the State
Controller.
41121.  After receiving the notice the person so notified shall
neither transfer nor make any other disposition of the credits, other
personal property, or debts in their possession or under their
control at the time they receive the notice until the board consents
to a transfer or disposition or until 60 days elapse after the
receipt of the notice, whichever period expires the earlier.
41122.  All persons so notified shall forthwith after receipt of the
notice advise the board of all such credits, other personal
property, or debts in their possession, under their control, or owing
by them.  If such notice seeks to prevent the transfer or other
disposition of a deposit in a bank or other credits or personal
property in the possession or under the control of a bank, the notice
to be effective shall state the amount, interest and penalty due
from the person and shall be delivered or mailed to the branch or
office of such bank at which such deposit is carried or at which such
credits or personal property is held.  Notwithstanding any other
provision, with respect to a deposit in a bank or other credits or
personal property in the possession or under the control of a bank,
the notice shall only be effective with respect to an amount not in
excess of two times the amount, interest and penalty due from the
person.
41123.  If, during the effective period of the notice to withhold,
any person so notified makes any transfer or disposition of the
property or debts required to be withheld hereunder, to the extent of
the value of the property or the amount of the debts thus
transferred or paid he shall be liable to the state for any
indebtedness due under this part from the person with respect to
whose obligation the notice was given if solely by reason of such
transfer or disposition the state is unable to recover the
indebtedness of the person with respect to whose obligation the
notice was given.
41123.5.  (a) The board may, by notice of levy served personally or
by first-class mail, require all persons, other than a service
supplier, having in their possession, or under their control, any
payments, credits other than payments, or other personal property
belonging to a service user or other person liable for any amount
under this part to withhold from these credits or other personal
property the amount of any surcharge, interest, or penalties due from
the service user or other person, or the amount of any liability
incurred by them under this part, and to transmit the amount withheld
to the board at the time it may designate.  The notice of levy shall
have the same effect as a levy pursuant to a writ of execution
except for the continuing effect of the levy, as provided in
subdivision (b).
   (b) The person served shall continue to withhold pursuant to the
notice of levy until the amount specified in the notice, including
accrued interest, has been paid in full, until the notice is
withdrawn, or until one year from the date the notice is received,
whichever occurs first.
   (c) The amount required to be withheld is the lesser of the
following:
   (1) The amount due stated on the notice.
   (2) The sum of both of the following:
   (A) The amount of the payments, credits other than payments, or
personal property described above and under the person's possession
or control when the notice of levy is served on the person.
   (B) The amount of each payment that becomes due following service
of the notice of levy on the person and prior to the expiration of
the levy.
   (d) For the purposes of this section, the term "payments" does not
include earnings as that term is defined in subdivision (a) of
Section 706.011 of the Code of Civil Procedure or funds in a deposit
account as defined in paragraph (29) of subdivision (a) of Section
9102 of the Commercial Code.  The term "payments" does include any of
the following:
   (1) Payments due for services of independent contractors,
dividends, rents, royalties, residuals, patent rights, or mineral or
other natural rights.
   (2) Payments or credits due or becoming due periodically as a
result of an enforceable obligation to the service user or other
person liable for the surcharge.
   (3) Any other payments or credits due or becoming due the service
user or other person liable as the result of written or oral
contracts for services or sales whether denominated as wages, salary,
commission, bonus, or otherwise.
   (e) In the case of a financial institution, to be effective, the
notice shall state the amount due from the service user and shall be
delivered or mailed to the branch or office of the financial
institution where the credits or other property is held, unless
another branch or office is designated by the financial institution
to receive the notice.
41123.6.  (a) Notwithstanding Article 7 (commencing with Section
706.151) of Chapter 5 of Title 9 of Part 2 of the Code of Civil
Procedure, if the board determines upon receiving information from
any person liable for any amount under this part that the person's
employer withheld earnings for taxes pursuant to Section 41123.5 and
failed to remit the withheld earnings to the board, the employer
shall be liable for the amount not remitted.  The board's
determination shall be based on payroll documents or other
substantiating evidence furnished by the person liable for the tax.
   (b) Upon its determination, the board shall mail notice to the
employer at its last known address that upon failure to remit the
withheld earnings to the board within 15 days of the date of its
notice to the employer, the employer shall be liable for that amount
which was withheld and not remitted.
   (c) If the employer fails to remit the amount withheld to the
board upon notice, that amount for which the employer is liable shall
be determined, collected, and paid as though it were a tax
deficiency.  The amount may be assessed at any time prior to seven
years from the first day that the unremitted amount, in the
aggregate, was first withheld.  Interest shall accrue on that amount
from the first day that the unremitted amount, in the aggregate, was
first withheld.
   (d) When the determination against the employer is final and due
and payable, the person's account shall be immediately credited with
an amount equal to that determined amount as though it were a payment
received by the board on the first date that the unremitted amount,
in the aggregate, was first withheld by the employer.
   (e) Collection against the person liable for the tax is stayed for
both the following amount and period:
   (1) An amount equal to the amount determined by the board under
subdivision (a).
   (2) The earlier of the time the credit is applied to the person's
account pursuant to subdivision (d) or the determination against the
employer is withdrawn or revised and the person is notified by the
board thereof.
   (f) If under this section an amount that was withheld and not
remitted to the board is final and due and payable by the employer
and credited to the person's account, this remedy shall be the
exclusive remedy for the person to recover that amount from the
employer.
   (g) This section shall apply to determinations made by the board
on or after the effective date of the act adding this section.


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