FTB Has Disclosed Penalties Are Being Falsely Imposed Due to FTB’s Customer Service Failures

At the board meeting on March 28, 2023, FTB is going to ask for $25.23 million more dollars so they can hire more customer service agents and give raises to existing agents. To justify this request, FTB just released the following data:

  • 54% of live chats go unanswered (page 3)
  • Correspondence sent via USPS is processed within 4 – 5 months (page 3)
  • Correspondence sent via MyFTB is processed within 30-days (page 8)
  • Only 40% of calls are answered (page 12)
  • FTB also disclosed that they have very high attrition rates for people who work in customer service. They attribute it to low pay and it being a stressful job (page 11).

In the document  FTB admits that people were having penalties falsely imposed due to lack of customer service. The document doesn’t admit that they falsely impose wage garnishments, levies and liens, but it is implied with words such as “moved into involuntary collections.”  

FTB is asking for $25.23 million more dollars so they can hire more staff to improve these numbers and give raises to existing staff to keep them from quitting. Their goals are: 75% of calls and live chats answered, 10-day turn time for correspondence sent via MyFTB and 30-day turn time for correspondence sent via fax.

The problem is that, even if FTB gets all the money they are asking for, the customer service levels will still be poor and thus false penalties will be imposed, along with false wage garnishment, levies and liens. 

What Can Be Done to Solve This? I have taken a 3-prong strategy:

I. On March 20, 2023, I sent FTB’s executives and board members a letter with some suggestions on how to improve the attrition rate. The full letter is here. Some excerpts can be found below.

II. I forwarded the letter to my state senator, my assemblyman, all the staff and members of the State Senate Governance and Finance Committee, all the staff and members of the Assembly Committee on Revenue and Taxation, select people on Governor Newsom’s staff and select people at GovOps. In the forward, I wrote:

“FTB just disclosed some horrifying information on its customer service failures…
This document proves exactly why judicial oversight is needed prior to the issuance of wage garnishment, levies and liens… Below is an email that I sent to FTB’s Board of Directors and Executives in which I provide 5 suggestions to reduce attrition. Items 3 and 4 further explain why FTB needs judicial oversight.”

 III. I’ve reached out to some people at local media who may be interested in covering this story. Update: Audra Morgan of Eye of the Storm did a podcast about this FTB story.

Excerpts from the letter to FTB re: Reducing Attrition

“I fully support additional funding for customer service agents… I have some specific feedback that may help reduce the attrition rates. 

Issue 1: 
It is my personal belief that the high attrition rate is tied to FTB’s demanding its employees engage in unethical and unlawful behaviors as a part of their job duties. Even if the employees themselves have not been asked to do anything unethical, anyone with a strong moral compass will still quit once they find out that their coworkers are engaging in behaviors such as: 1. instructing taxpayers to send more money than the bill states is due, then falsifying records to hide the overcharge, 2. not applying estimated tax payments that were supposed to be immediately applied until after late penalties have been falsely imposed, 3. repeatedly “misapplying” payments in order to falsely impose late penalties, and/or 4. misrepresenting what the laws say to deceive taxpayers. And these are only a few examples of unethical and unlawful behaviors that FTB customer service representatives have done me. I can cite many more examples. 

Likewise, from what I have seen, FTB operates in a manner in which employees are encouraged to throw one another under the bus, such as committing suborning perjury or making Christopher Calhoun and the Taxpayer Advocates sign letters that they didn’t author which contained unlawful and fraudulent statements. I think most people would start job hunting once they saw that kind of back stabbing happen to someone else. I think that most people realize that it’s only a matter of time before they became the victims of such predatory behaviors. 

Issue 2: 
Does the FTB still list the main customer service line on all notices, even when the main customer service cannot help the taxpayer?… This leaves the taxpayers angry and frustrated. Dealing with such angry people probably adds a lot of unnecessary stress which contributes to the high attrition rate. 

Issue 3: 

Could you please explain why FTB processes these two different types of correspondence in different timeframes, and address why FTB believes that this policy does not violate R&TC  21027, which specifically says that all correspondence must be processed in the same timeframes no matter what the method of delivery. 

Because of the time sensitive nature of the correspondence, all correspondence, no matter whether sent via overnight express, fax, MyFTB or USPS should be processed within 48-hours. I believe that it is imperative that FTB request more staff — and that the Board grant the request — so that FTB can reduce the turn time for correspondence to 48-hours and maintain it at that level. As you will read in Issue 4, the slow processing times for correspondence is a major factor in what makes the the customer service agents’ jobs so stressful. 

Issue 4:

I don’t believe that anyone with a strong moral compass can watch FTB destroy people’s lives with aggressive behaviors such as wage garnishments that result from FTB’s own gross negligence to process correspondence timely. I believe that the attrition rate will not improve until FTB timely processes all correspondence received, no matter what method of delivery.  

Issue 5:

I documented that I called FTB 33 times regarding 12 “lost” payments before a customer service agent finally disclosed to me that the 12 payments were never lost, they were intentionally withheld per FTB’s standard operating procedure. Had that information been disclosed online, it would have saved 33 angry phone calls to FTB. 

FTB has still failed to disclose online exactly when payments that are supposed to be “immediately applied” are actually applied to the taxpayer’s account. It isn’t fair to your agents to have to deal with someone who is hysterical because the NPA says they made no estimated tax payments when they had actually made five payments… How does someone feel good about trying to justify the disappearance of monies from FTB’s official records (especially when the money “disappearing” lead to the imposition of penalties that wouldn’t have otherwise been imposed) when there are no official sources to point to? 

Such disclosure would benefit FTB tremendously by reducing the number of angry phone calls, and thus reduce how stressful the job is for the customer service agents, and thus improve employee retention rates.”