If you fail to pay your tax liability in full, the state of New York reserves the right to take a series of collection actions to obtain payment. For businesses, the self-employed, and W-2 earners, a financially tough year can turn into problems with the New York State Department of Taxation and Finance.
Anyone who receives a tax warrant in the mail or another form of direct communication from tax officials must take action quickly to resolve outstanding tax issues.
A tax warrant is serious, but taxpayers can take several actions to reduce the likelihood of collection actions such as levies, income execution (wage garnishment), and property seizure. Before you contact the state to address your warrant, explore these answers to the most commonly asked questions about state tax warrants.
As a taxpayer, you have certain rights under the law. Take time to understand tax warrants, your rights, and your options for resolution to find the right answers for your situation.
For personalized help from a Certified Tax Resolution Specialist, reach out to Long Island Tax Resolution Services.
Overview of Tax Warrants in New York State
The Department of Taxation and Finance’s collection department initiates actions against taxpayers and businesses who:
- Fail to pay a tax liability assessment.
- Fail to pay a bill before the document deadline (late payment).
- Are no longer eligible to appeal the tax assessment.
The state’s department reserves the right to take action against those who owe taxes to the state or to New York City. After you receive a notice of deficiency or a notice of determination from the state, you have 90 days to dispute, pay, or otherwise resolve the outstanding balance.
At the end of 90 days, the collection department will obtain a legally enforceable judgment (legal action) from the courts.
A tax warrant creates a lien against real and personal property and gives the state (law enforcement officers or tax officers) the ability to enforce all other collection actions.
Tax warrants precede all forcible collection actions including levies, income executions, and property seizure. They may also affect a taxpayer’s credit rating, and can impact future borrowing and sales capabilities.
After the tax department obtains a warrant, you still maintain options for resolving your outstanding tax bill without handing over your paycheck or personal property.
Do not ignore the warrant.
Instead, work with a qualified professional to resolve the issue and protect your future financial solvency.
Frequently Asked Questions About New York State Tax Warrants
We’ve compiled several questions about tax warrants to help you feel more confident in your ability to recover from collection actions. If you have any questions about our answers or want to learn more about how the rules apply in specific cases, please reach out to one of our team members at 631-244-1650 for more information.
What type of warning does the state give before it files a tax warrant against me?
If the state determines you owe part or all of your tax liability, it will send a notice of deficiency or a notice of determination to the address on file. Individual taxpayers and franchise taxpayers receive notices of deficiencies, while businesses owing sales and use taxes receive notices of determination.
The notice indicates the amount of time you have to respond. The standard time frame is 90 days. Within the 90-day period, you can pay the outstanding debt, appeal the tax department’s assessment, or arrange for another form of resolution.
After the 90-day period, the department may take further action. Before filing a tax warrant, the state will mail a notice and demand payment. You have an additional 21 days from the date listed on the notice before the state takes further action against you.
The notice you receive should include information about the reason for the assessment, how to dispute the assessment, and how to learn more about your rights as a taxpayer.
Tip for Tax Resolution: Keep a file of all notices and correspondence with the state tax department for future reference. The department must follow certain protocols for taking action to enforce liability.
I didn’t receive a notice. Am I still bound by the 90-day time frame?
If you didn’t receive your notice or demand for payment, you are still obligated to respond to the tax department. The state will send the notice to your last known address. Unless the state sends your notice to an address not associated with your information on file, it remains a valid and legally binding notice.
All taxpayers are responsible for updating mailing address information as changes arise. Update your mailing address to reflect your current information – not receiving a notice may affect your 90-day time frame for responding.
What is the process for filing a tax warrant?
If you fail to respond to the department within the given time frame, tax officials can obtain a tax warrant and docket the warrant (file a copy) with the county clerk within five days. The state can only pursue a warrant and further collection actions if the assessment of outstanding debt is final.
Once filed, the warrant is part of the public record. Anyone can search for the warrant through the state’s database and use the information to make lending and purchasing decisions. For example, credit agencies use tax warrant records to calculate credit scores for individuals and businesses.
The warrant serves as a lien (legal claim) to your property. Liens prevent taxpayers from selling off property to avoid collection actions. If you want to sell property and have an active lien against you, you must arrange to pay your debt with guaranteed funds from the sale. Once the state files a tax warrant, it reserves the right to impose several types of levies (asset seizures) to satisfy the debt due and owed at the time of the filing.
New York will send a final tax notice that serves as a state tax warrant notification. The time-sensitive letter and the state’s database will affirm the validity of the tax warrant. Tax warrants remain legally binding regardless of receipt.
Tip for Tax Resolution: Always double-check any warrant letter using the state database and/or the county clerk’s office. In past years, scam artists used tax assessment notices to con unsuspecting taxpayers into paying false assessments.
Is a tax warrant similar to an arrest warrant?
Tax warrants give authorized officials the ability to take certain collection actions and:
- Seize financial assets. The state can contact financial institutions and obtain payment through your accounts without your permission.
- Seize your wages. Through income execution actions, the state can demand a percentage of your monthly wages or take your wages with cooperation from your employer.
- Seize your property. The state can take land, investment properties, homes, and other sellable assets to pay off your debt.
- Suspend your driver’s license. New York reserves the right to suspend your driver’s license until you pay your tax debt.
Unlike an arrest warrant, a state official may not detain taxpayers for failing to pay their taxes. The state can make your life financially miserable, but it will only take criminal actions against residents whom they suspect have committed crimes.
Can New York file a tax warrant for unpaid taxes from 10 years ago?
The state cannot hold you accountable for a lifetime of unpaid taxes. It can only file a tax warrant six years from the date of assessment. After six years, the state cannot take collection actions via a tax warrant.
How long will the state enforce collection actions to receive payment?
While New York must file a warrant within six years, all filed warrants remain valid for 20 years. The state can legally pursue action to collect the total amount of outstanding debt during this time.
What if I do not own enough assets to pay my tax debt?
The state cannot collect what you do not have. If you do not have the means to pay your debt in some way, the state may label the account as non-collectable. This is not a strategy for tax resolution, but a reality for some taxpayers in the midst of serious financial hardship.
If you cannot reasonably pay your tax debt, you should still make an effort to resolve your outstanding debt with the state. In some cases, the state may settle the tax debt for some percentage of the total (an offer in compromise).
Does the state require a separate court ruling to take my property?
The warrant gives the state the authority to seize your property. Officials acting on behalf of the tax department can impose levies, garnish your wages, and suspend your driver’s license. However, the state must adhere to certain standards during seizure and sale activities. They cannot sell your property if you pay your balance before the sale, and they must sell your property for fair market value. Taxpayers retain the right to any proceeds in excess of the total tax liability.
What does a tax warrant require me to pay?
When the state files a warrant, it covers all outstanding tax debts, interest, and penalties owed at the time of filing. If you fail to address the warrant, penalties and interest continue to accrue on the total debt amount.
Tip for Tax Resolution: Resolve your debt issues with the state sooner rather than later to avoid compounding fees on top of the original debt amount.
If I leave the state, does the warrant go away?
No. Article IV, Section 1 of the United State Constitution discusses “full faith and credit” and creates accountability among states. All states must enforce judgments of other states. The warrant stands regardless of state as long as the taxpayer’s rights were not violated. New York reserves the right to contact employers and financial institutions in other states to obtain compensation, and other states will enforce the warrant.
Tip for Tax Resolution: In some cases, the lien created with a tax warrant filing only covers local property. As soon as you receive notice of a tax warrant filing, talk to a resolution professional to create a personalized strategy to protect your property in the event that it falls out of the warrant’s jurisdiction.
How will the state collect payment if I refuse to cooperate?
While you may not go to jail for non-fraudulent tax debt, the state can create equally trapping circumstances. Agents may show up at your home or office to arrange some form of payment. They are trained to encourage compliance, even if the deal does not work in a taxpayer’s best interests.
State officials can take collection actions against you at their leisure and leave you without your paycheck, account savings, driver’s license privileges, or your property.
Nobody wants to deal with outstanding tax debt, especially as interest and penalties increase the total amount of debt every day. However, refusing to cooperate only gives the state of New York more power over your life. Losing your home, vehicles, autonomy over your paycheck, and other rights often results in emotional and financial difficulty.
Debt resolution tactics, such as offers in compromise and installment plans, enable taxpayers to protect their financial independence and reduce or eliminate moderate to significant outstanding tax debt on fairer terms.
How can I remove a tax warrant?
To release a tax warrant, taxpayers must do one of the following:
- Determine that the tax warrant was issued in error. To do this, tax resolution specialists will evaluate the notification process, the tax assessment calculations, and other factors that may affect a warrant’s enforceability. The state will vacate wrongly filed warrants.
- Satisfy the debt. The state will remove the tax warrant as soon as it receives full payment or enters into an agreement with a taxpayer for payment.
The state may also release a levy or lien if:
Collection actions result in undue hardship. For those in serious financial straits, New York may release a levy and/or return any previously seized property.
- You file for bankruptcy. The state will not pursue collection actions against anyone filing for bankruptcy. Those who successfully file for bankruptcy may totally or partially discharge state tax debt. Always consider bankruptcy a last resort in resolving outstanding tax debt.
- The statute of limitations ends. After 20 years, the state cannot pursue collection actions for outstanding debt.
How can I resolve my tax issues if I can’t pay?
If you cannot pay your tax debt in full, you have two choices: You can do nothing and allow the state to take compensation from you, including penalties and interest, or you can take immediate action to resolve the situation. The state of New York enforces some of the strictest tax laws in the United States.
To resolve your tax issues, you can either negotiate with the state on your own or work with a tax specialist and potentially reduce the total amount owed. While many taxpayers associate tax resolution services with scams of the past, several services provide access to certified specialists qualified to represent individuals in front of tax bodies.
Tax resolution solutions may include one or a combination of the following tactics:
- Offer in compromise. New York allows delinquent taxpayers to enter into these agreements and settle their debts for a certain amount of the total. The state will only grant an offer in compromise if it believes the solution will deliver the maximum amount of compensation a person can feasibly pay.
- Ceasing collection actions. To implement a full tax resolution strategy, many taxpayers need to stop current collection actions first. Using a variety of tactics a tax expert may halt income executions, levies, and property seizures.
- Penalty abatement. While this tactic will not remove tax debt, it can significantly decrease the total amount owed. If you have a reasonable explanation for not paying your tax debt on time, you may qualify for this form of support.
- Relief programs. In some cases, taxpayers unknowingly fall behind on taxes as a partner in a joint filing. If you meet certain criteria, the state may release you from outstanding debt.
- Installment agreements. Like any other payment plan, the state will allow those with strong payment histories to enter into an installment agreement. Taxpayers can pay their debt, with interest, over a period of months or years instead of all at once.
These and other tax resolution strategies can significantly reduce the total amount of debt a taxpayer pays. Without the support of a professional, many people end up paying the state far more than needed to resolve their issues. A qualified tax professional can provide insights into asset management, debt relief programs, and tax laws that may affect the validity of a warrant.
Who is the best person to help me resolve my tax issues?
If you choose to work with a professional to resolve your issues, you will see advertisements for tax experts from many different backgrounds. Accountants, attorneys, certified tax resolution specialists, and tax preparers commonly offer resolution services. While each of these experts offers professional-level support, some may provide better solutions for your needs than others. For example, tax preparers may not understand the state tax code well enough to offer comprehensive counseling and support.
Many attorneys understand the tax code, but they may not understand the financial side of your situation. We recommend looking for tax resolution services firms that employ a team of tax-focused professionals and offer reasonable fee structures.
Long Island Tax Resolutions Services Can Help with NYS Tax Warrants
Receiving a tax warrant does not mean you’re a bad person, that you’re going to jail, or that you’ll never overcome your debts. Many individuals and business owners struggle with taxes at some point. With the right support, you can resolve your debt with the state and get back to living your life on your terms.
At Long Island Tax Resolution Services, we offer our clients access to a team of certified tax resolution specialists, tax attorneys, tax advisors, accountants, and financial planners. Our holistic approach to tax resolution enables us to create long-term plans for tax success in the state of New York and at the federal level.
We provide each client with personalized support and a customized solution for complete tax resolution. From assessing your current situation to creating a step-by-step plan for future success, our experienced professionals provide complete tax resolution support.
Qualified tax resolution is not an easy or magic fix, but it is a permanent fix if you partner with the right firm. Our longtime tax, legal, and financial industry veterans can help you find a solution for your state and federal tax problems.
Don’t let New York’s stringent collection actions keep you from financial success. Consider Long Island Tax Resolution Services as your guide through one of the most complex tax systems in the country. For more information about stopping collection actions and eliminating debt, contact our office for a free case evaluation.
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