NY STATE TAX PROBLEMS

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.

Links:

http://www.longislandtaxresolution.com/10-frequently-asked-questions-new-york-state-tax-problems/
http://www.governor.ny.gov/sites/governor.ny.gov/files/archive/assets/documents/Notice-2.pdf
http://www.dos.ny.gov/corps/tax_warrant_search.html
https://www.tax.ny.gov/pdf/publications/general/pub125.pdf
https://www.tax.ny.gov/enforcement/warrant_info.htm
https://www.tax.ny.gov/enforcement/collections/oic.htm
https://tax.ny.gov/enforcement/collections/seizures.htm
https://www.law.cornell.edu/constitution/articleiv
https://www.tax.ny.gov/pay/all/ipa.htm
https://www.tax.ny.gov/pit/file/innocent_spouse.htm

In the world of taxes, the IRS often takes the center stage.
However, state tax laws feature their own set of rules and consequences. Many of these align with federal standards, but some do not. For instance, the state of New York can suspend your driver’s license if you fail to pay your taxes or fail to make alternative arrangements with the state.

When you fall behind on tax payments or receive a notice from the state tax department, you may have many questions about your own situation.

Here are 10 of the most frequently asked questions about New York State Tax Problems we receive with the answers you need to make better informed decisions about your tax liability:

1. Will the police arrest me if the state files a tax warrant against me?
2. What types of property can the state take from me via a levy?
3. When will the state start to garnish my wages and how do they do so?
4. What is the difference between real and personal property?
5. Will New York really take my license away for failing to pay?
6. Can I appeal an innocent spouse relief denial at the state level?
7. Will I qualify for an offer in compromise from New York?
8. Am I at risk for a New York state tax audit?
9. Could I be at risk as a responsible person for the tax liability of a company I work for?
10. Is a state installment agreement a better idea than personally financing my debt liability?

1. Will the police arrest me if the state files a tax warrant against me?

No, the police will not arrest you unless the state suspects you of criminal activities, such as fraud. A tax warrant does not work like an arrest warrant.

The state will issue this type of warrant after sending a Notice of Demand regarding insufficient payment. The warrant serves as a public record of your debt and authorizes the tax department to take further collection actions, including levies, income executions, and property seizures.

Unfortunately, you may not receive personal notification of the warrant. You can always look for active warrants against you at the local county clerk’s office or with the department of state.

If you discover the state has filed a tax warrant against you, you must take action to resolve your debt. To remove a warrant, you need to satisfy your debt liability or have the state vacate the warrant.
You can pay in full or negotiate a repayment plan to satisfy the debt or prove that the state made an error in issuing the warrant to vacate it.

2. What types of property can the state take from me via a levy?

If you fail to satisfy your debt after a warrant has been issued, the state may issue a levy to secure your assets.
Under the most commonly used levy, financial institutions and other third parties that manage your finances must turn your money over to the state to satisfy your debt. In other words, your checking and savings accounts are at risk for collection.
If a company or person owes you money, the state can also seize that amount. For example, the state can claim monthly payments you receive for rental properties.

The state cannot take funds that are considered exempt under the law.
It may not seize social security and supplemental security income, welfare payments, funds allocated for child support or alimony, pensions, and employment benefits, including worker’s compensation settlements and unemployment payments.

To satisfy a levy, you must pay your debt, arrange for debt repayment, or provide documentation supporting why certain funds are considered exempt.

You may not receive several warning notices before the state issues a levy. Consider any warning a red flag that you need to address your tax situation immediately.

3. When will the state start to garnish my wages and how do they do so?

The timeframe for beginning wage garnishment varies, depending on individual circumstances. If you do not have the financial funds needed to satisfy your debt through a levy and you do not negotiate the terms of repayment, the state can file an income execution, send notice, and begin garnishing your wages.

You should receive a notice regarding the terms of income execution called a First Service. From the time you receive the initial notice, you have 20 days to begin paying the state, and you must pay as soon as you receive payment.
If you fail to comply with the terms of the income execution, the state will issue a Second Service instructing your employer to send a certain amount of money out of each paycheck. This means you will not directly receive full compensation for your work.

This collection action will continue until your debt liability is resolved.

Under an income execution, the state can take up to 10% of your gross income or 25% of disposable earnings as long as the action would not put you into serious economic hardship.

4. What is the difference between real and personal property?

In a final collection action, New York tax collectors may seize and sell your real and personal property if the state believes the sale’s proceeds would meet or exceed the fair market property value and cover the expenses associated with seizure. Most of the time, this means the state will take your home or your business property, but this action can include any type of non-exempt real and personal property.

Real property includes all immovable assets, such as real estate and buildings. Personal property, on the other hand, includes all other types of property. For example, refrigerators, watercrafts, equipment, and furniture are all considered personal property.

If the state does seize your property, you have an opportunity to reverse the process before the sale. New York will work with you and return your property if you are willing to make arrangements to satisfy your debt or to pay it in full. After a sale, the state should send you any proceeds that exceed the debt you owe.

5. Will New York really take my license away for failing to pay?

Since 2013, the state’s tax department has the right to suspend your license if you owe $10,000 or more. The state will only take this action on debt that is past due and after the timeframe for review has passed.

If the tax department takes this action, you will receive a notice regarding the action and the timeframe you have to resolve the issue. You should have 60 days to respond.

You can avoid license suspension if you:

• Work with the tax department to negotiate a payment plan
• Hold a commercial driver’s license
• Are already experiencing income executions for tax debt, child support, or spousal support
• Were sent a notice erroneously and remit evidence of the error
• Are in the process of or are currently receiving protections under innocent spouse relief laws
• You are going through bankruptcy

You must work with the tax department, not the DMV, to remove a tax-related license suspension. Until the DMV receives a notice from the tax department, your license will remain suspended. Anyone who does not have a license may face restrictions on obtaining one.

6. Can I appeal an innocent spouse relief denial at the state level?

Yes, you can appeal a denial notice.
To qualify for innocent spouse relief, you must prove you did not know and had no reason to know about an error or omission on a joint tax return. You may also qualify for partial relief if you knew about an error but were not aware of the full extent of the problem.

In some cases, due to lack of information or misrepresentation, the state may reject a qualified application for innocent spouse relief. If you receive a notice of denial or terms for partial relief that you do not agree with, you do have the ability to contest the state’s findings.

You can file a Request for Conciliation Conference or petition for a Division of Tax Appeals hearing to resolve the matter. Take note of all dates and timelines during this process. You must respond in a timely manner to maintain your right to an appeal.

7. Will I qualify for an offer in compromise from New York?

An offer in compromise allows some people to pay a portion of their debt to resolve their total liability. You may qualify for this type of relief if you cannot reasonably pay back your full debt, if your debts were discharged or renegotiated during a bankruptcy, or if repaying the debt would put you into economic duress.

The tax department uses its discretion to judge each application on a case-by-case basis. These offers are custom-built to maximize the state’s earnings while ensuring that individuals who qualify can meet the terms of the agreement. Qualifying based on undue economic hardship is a relatively new criteria for state-based offers in compromise.

If you believe you may qualify, seek additional advice from a tax expert before submitting your application. A tax specialist will ensure your application accurately reflects your financial situation.

8. Am I at risk for a New York state tax audit?

The audit process is designed to help the tax department identify and correct errors in tax returns. In some cases, an audit will reveal changes in tax liability. If you owe the state, you will receive a bill after the audit. In some cases, the state may owe you and send an additional refund.

You may be at an increased risk for an audit if you:

• Claimed too many credits and/or exemptions
• Did not file your return or report certain income
• Filed a return that contained discrepancies when compared with third party information from employers, banks, etc.
• Have a history of errors or prior audits
• Filed a return that contains incorrect or potentially fraudulent information

To avoid a tax audit, work voluntarily with the tax department to settle all outstanding tax liabilities, file accurate returns every year, and only claim credits and exemptions for which you can prove qualification.

If you are singled out for an audit, you have certain rights and responsibilities. You may want to work with a tax professional to help you with the process and protect your rights.

9. Could I be at risk as a responsible person for the tax liability of a company I work for?

Under the state Tax Law, Section 1133, some individuals will face personal responsibility for the payment of corporate tax debt. Owners, directors, partners, managers, officers, and certain additional employees may all bear responsibility for business taxes.

Certain business structures, including LLPs and LLCs, may affect who the state recognizes as a responsible person. Some potentially responsible persons may qualify for relief. This is a particularly complex area of tax law.

If you are concerned that you may be classified as a responsible person, we recommend speaking with a qualified tax expert who can help you determine the hierarchy of responsibility within your business.

Even if you are a responsible person, you may qualify for relief if you can prove you were not required to act in a responsible role or if you can prove that your share of the business is less than 50% (which may relieve you from certain duties as a member of the organization).

In general, those who are partners in an organization and those who own more than half of a business will not qualify for relief from tax liabilities.

10. Is a state installment agreement a better idea than personally financing my debt liability?

Some people are so afraid of working with state and federal tax agencies that they use consumer credit to pay off tax debt. However, debt relief programs (such as installment payment agreements in New York) often provide better payment terms than a credit card or personal loan.

At the state level, an installment agreement will still accrue interest, but typically at a much lower rate than consumer credit arrangements provide. As long as you remember to pay the minimum amount agreed upon in the arrangement, the state will not take collection actions or charge additional fees on top of interest and penalties.

To sign up for an installment agreement in New York, use the tax department’s Online Services and follow the instructions. If the state denies your request, consider speaking with a tax expert about alternative solutions.

State tax issues can be confusing, particularly when they differ from federal rules and guidelines. Use these answers as a starting point, and reach out for further guidance if needed. There is always a positive alternative to inaction when it comes to state tax debt.

The New York State Department of Taxation and Finance will begin collection action against taxpayers who fail to meet their tax liabilities. At Long Island Tax Resolution Services, we often receive frantic telephone calls from taxpayers facing NY state tax collection actions.

The following are common examples of these types of calls:

• A business owner runs into cash flow issues and delays paying payroll taxes for several months or longer.
• A freelancer can’t pay his bills and fails to arrange to pay self-employment income taxes when they are due.
• A landlord fails to pay taxes on rental properties. Tenants start receiving levy notices and refuse to pay rent, leaving the landlord facing collection actions as well as going upside down on the monthly mortgage.

If you have arrived at the point of reaching out for help, New York State has probably already begun to move forward with some type of collection action. They may have already filed tax warrants against assets and property, issued a notice of levy, or taken some other collection action.

The state must give taxpayers notice before moving forward with any collection action. You then have 90 days from the notice mailing date to challenge the findings in a deficiency or determination notice. If you fail to respond within the allotted time, the state will begin taking more extreme actions to collect the outstanding debt.

State of New York Tax Collections Actions

A Notice of Demand is the last notice you will receive before New York State starts to take more aggressive collection action. You have 21 days to address the notice or pay the full balance before the state files a warrant.

1. Tax warrants.

• A tax warrant effectively creates a lien against your property. It serves as a public record of tax shortage, sets the groundwork for more collection actions, and may appear on personal and corporate credit reports. The state does not give warrant information to credit reporting bureaus, but the organizations can access the information within public records.
• Tax warrants against real property (land and buildings) can last for 10 years, and warrants against personal property (assets and movable property) are valid for up to 20 years. When mistakes are made, the state will cancel the warrant. The state will also cancel a warrant if you pay all taxes due including interest and penalties

2. Levies.

• If New York State issues a warrant and fails to receive payment, it may issue a legal order known as a levy. The state will not directly tell you before passing a levy. Levies need third parties such as banks.
  The state controls these assets until you fully pay the tax debt. Certain finances are free from levy actions, including social security income, welfare, alimony, child support, benefits, and pensions.
• You need to contact the state as soon as possible to discuss resolution possibilities. While you can approach the state on your own, you may want to involve a tax representative who can effectively negotiate the terms of a settlement on your behalf. To resolve levies, you can negotiate for an installment plan, an offer in compromise, or some other form of tax relief.

3. Income execution or wage garnishment.

• If necessary, New York State may also issue an income execution order, forcing you or your employer to directly pay a portion of wages to pay off tax debt. The state can take up to 10{bf3da7fb6a4d0e0e3790d09a79b980fc065e33e2f3a2d49280f7e95b82f4982b} of your gross income or 25{bf3da7fb6a4d0e0e3790d09a79b980fc065e33e2f3a2d49280f7e95b82f4982b} of your disposable earnings. Those under income execution orders must pay the first percentage within 20 days of receiving the notice and send in a payment after each pay cycle.
• If you fail to pay installment agreement payments on time, the state can issue and income execution. Unless you and the state agree to an alternative resolution the income execution order will remain in place. Once you fully pay the tax liability, the income execution is lifted.

4. Real and personal property seizures.

• If a levy and income execution do not satisfy your tax debt, New York State may seize and sell your real and personal property. This is the final and most serious collection action the state will take to secure outstanding tax dollars (assuming the state does not take criminal action you).
  The state will never close the door on you for finding a suitable resolution. If both parties agree to the payment terms, the state will return your property.
• If you and the state cannot agree on a suitable resolution, the state will keep just enough funds to cover the tax liability. The state will return any remaining funds to you.

Challenging a Notice of Deficiency or Determination

During the 90-day period after receiving a notice, you can file petition form TA-10 with the Division of Tax Appeals for an Administrative Law Judge (ALJ) hearing. You can also ask for a conciliation conference with the Bureau of Conciliation and Mediation Services by filing form CMS-1-MN.

During a tax appeal or conciliation conference, you or your tax resolution consultant has an opportunity to challenge the findings outlined in a notice. You also have the opportunity to negotiate a fair resolution while the department delays taking further collection action.

Conciliation conferences are a less formal way to resolve a challenge to a tax notice. A conferee oversees these proceedings. You will receive a proposed resolution and then have 15 days to accept or decline. If you decline the resolution, the conferee issues a Conciliation Order. The terms of this order binds both parties.

You can also file a petition for a hearing. After you file a petition, The Division of Tax Appeals in New York assigns an administrative law judge to the case who will meet with you during a pre-hearing conference.

If the judge and yourself come to an agreeable resolution, the case is closed.
If no agreement is reached the case enters the hearing phase.

Typically, the same administrative law judge will preside over both the pre-hearing conference and the hearing.

During the hearing, you can produce evidence supporting a claim against the tax liability. The judge will issue a determination within 6-9 months. Filing a petition for an appeal provides you with a way to settle the dispute or buy time to arrange a better tax resolution strategy.

If possible, reach out to a tax resolution consultant such as a US Treasury Enrolled Agent during the notice period. If you wait until the state begins taking collections actions, you may face tax warrants and liens, levies, seizures, and/or income executions.

Bankruptcy and Collection Actions

A tax resolution consultant will never advise filing for bankruptcy as a first alternative. You should always consider bankruptcy as the final alternative. Some individuals must file for bankruptcy because of much wider financial issues. Tax liabilities are just part of the overall financial difficulties.

For these individuals, the state will stop all collection actions until the bankruptcy case is settled. Bankruptcy filings may dismiss tax debt or provide individuals with a reasonable repayment plan that reduces overall debt liability.

Avoid Collection Actions at All Costs!

Many taxpayers believe that negotiating with the state is futile—a common misconception. Tax agencies prefer to work with you instead of taking legal actions against you. They only take collections actions if you fail to cooperate with them.

While New York State is willing to work with you to resolve the tax issue as quickly as possible.

The state’s sole objective is to collect as much outstanding tax debt as possible. The state will not provide you with advice on how to avoid tax problems in the future.

If you have not contacted a tax resolution consultant before the NY State tax collection actions begin, it’s not too late. Reach out to someone who is legally representing you in front of the state tax department, and give him or her all the information you have.

As a taxpayer, you have rights. A qualified tax resolution consultant will go over all the facts of your case, ensuring the state did everything properly during the notice period. If your tax returns contain any mistakes or the state made an error, you may not owe what the state says you owe.

You also have access to several forms of tax relief designed to ease the load of unexpected financial hardship.

Most taxpayers want to resolve tax problems without the risk of credit damage or asset seizure, regardless of the debt amount or financial. At Long Island Tax Resolution Services, we help you to develop strategies to deal with collection actions and to resolve tax issues permanently.

Contact us today for a free consultation, and learn more about our individualized approach to New York State tax solutions.

Millions of individuals and small businesses experience IRS tax problems each year. They range from filing incomplete or false tax returns to not paying the necessary taxes at all. Experts estimate that one in five taxpayers needs help with outstanding IRS tax problems.

If the IRS calculates that you owe back taxes, they will use various tools to get the taxpayer to settle that debt. Here is an alphabetical list of each IRS tax problem and the tools used by the IRS to deal with them. Between three and five of these categories will usually broadly define the typical taxpayer back tax problem.

Here’s an alphabetical list of the most common tax debt problems. Please go through these concise descriptions to see which categories apply to you. Then research your categories further by clicking through to more specific articles in the BLOG CATEGORIES list over in the column on your right to better understand where you stand with your tax problem resolution.

An Enrolled Agent, Tax Attorney or CPA that specializes in tax resolution work, can help taxpayers solve their tax problem. Long Island Tax Resolution Services specialty is helping with New York State and IRS tax problems in Long Island.

Audits

The IRS uses letters to communicate with taxpayers about audits, and these letters always include a deadline. You have only until the stated date to prepare an audit response, with all necessary documentation. However, it’s not necessary that an error has occurred, for audits can also result in a refund to the taxpayer or even a no due tax determination.

Back Taxes

Unpaid taxes are probably the most common of back tax problems. The IRS usually takes actions on defaulting taxpayers, whether it is because of partial or complete non-payment of taxes. Based on your unique financial status, it is critical to understand what alternatives are available to you, and only an tax specialist with experience in the field can truly help with a back tax problem. 

Death and Tax Debt

Tax debt problems do not necessarily die with the debtor.  The debtor’s estate becomes responsible for the deceased’s tax debt. It then falls to the estate executor to resolve the tax debt problem. Tax debt problems can also become the responsibility of a surviving spouse. The IRS can hold descendants responsible who have already received an inheritance (even if spent) if there is tax debt still outstanding against an estate.

IRS Levy

While a tax lien is simply a claim on property, a tax levy is a legal seizure of property by the IRS to satisfy a tax debt. Examples of seizable assets are: cars, boats, houses, wages, retirement accounts, bank accounts and many others. It is important to act quickly to stop or release a levy, since it can completely disrupt your life. For ideal protection, you should seek help from a tax resolution expert who can assess your finances and help with suitable strategies for tax debt problems.

IRS Lien

A tax lien is the first collection action used by the IRS for settlement of tax debt. It is a legal claim against property and protects the government’s interest versus other creditors. Upon receiving a notice of tax lien, it is crucial that you begin working immediately with a certified expert trained in IRS methods and procedures to initiate defensive action. Additional steps should be taken to stop future actions of this nature.

IRS Notices

IRS Notices are basically information sent to taxpayers regarding tax problems with their account. Most notices are about back taxes and will include an early assessment of debts including penalties and interest. Threatened actions become increasingly serious the further down the line you get in the sequence of notices you get.

Offshore Issues

Recently, the IRS hired over 800 new employees to exclusively deal with international enforcement. They include agents, lawyers, economists and other experts. This is an attempt to ensure that U.S. taxpayers cannot evade taxes simply by moving income and assetts offshore.

Payroll and Sales Tax

Both the IRS and the States have become increasingly attentive to collecting tax debt owed in the areas of payroll and sales tax. Assessed penalties on these taxes as well as delinquent filings can dramatically increase the total amount owed. It is critical to have experts experienced with small business tax problems represent you. An interview done in time can make or break your business. It is crucial to consult a tax resolution expert to explore your alternatives.

Penalties and Interest

Back taxes accumulate interest over time. In addition, there are penalties like the “failure to file” penalty and “failure to pay” penalty. The IRS has more than 100 penalty categories for individuals and small businesses. Working with a certified specialist who is expert in the areas of penalties and interest can often get them decreased or even removed.

Retirement Accounts

The large number of retirement plans which are available today bring with them a complex set of rules and terms. Examples are withdrawal amounts, age limits, transfer rules, reclassifications and many more. These cause many types of tax problems with the IRS. Mistaken or incorrect reporting of retirement plan transfers and withdrawals cause significant problems. Seeking the advice of a tax resolution expert specializing in this area will help.

Small Business

Small business owners should educate themselves regarding potential tax problems in additional areas than those in payroll and sales tax already outlined above. For example it is critical to properly classify workers as either employees or independent contractors. Misclassification results in income misrepresentation and carries stiff penalties. Preventative steps can be taken by consulting with a tax resolution expert familiar with the specific needs of small businesses to ensure that no problems occur in the future.

State General

The current recession has negatively impacted the financial condition of most states. To combat this, states have become much more vigilant in collecting tax debt. Both high income and small business taxpayers are especially vulnerable. Each state has its own set of procedures and rules for dealing with tax debt, so it is important to work with experts specializing in tax relief in your particular state.

Unfiled Returns

Neglecting to file tax returns is a criminal act. Typically, the IRS will file a substitute tax return on your behalf. The only deductions you will receive are personal exemption and standard deduction. Deductions for your spouse, children, mortgage interest, real estate taxes, capital gains, business expenses and others will not be taken into consideration. It is important to file your tax returns, no matter how late they are, in order to ensure you get all the tax deductions coming to you. More importantly, a tax resolution process cannot even begin until all overdue tax returns are filed with the IRS.

Wage Garnishment

Wage garnishment notices mean that wages will be deducted from your pay check to settle outstanding tax debts. Your employer is notified of your back tax problem and is then required to send to the IRS a portion of your wages to offset the debt. If you don’t respond, your wages will continue to be garnished until the debt is completely satisfied. Our team will work with the IRS to negotiate terms and get you full or partial release of the wage garnishment, thereby giving you tax relief.