How to Resolve New York State Tax Notices

Getting a notice from the Department of Taxation and Finance or a local taxing authority can be alarming. You may owe back taxes and New York State is taking actions to collect, such as income execution or driver’s license suspension. You may be facing an audit, or the notice may be about a number of other tax matters.

Understanding what your notice means and the immediate steps to take are crucial to getting yourself back in good standing with the NY tax agency. This guide walks through the types of tax notices in New York, how to respond, and the consequences of ignoring these notices.

The Law Offices of Stephen B. Kass , PC assists clients with New York tax issues, whether individuals or businesses. Navigating tax notices is one of our firm’s specialties, and we can help you deal with the matter promptly. To get help now, contact our office for further assistance.

The Anatomy of an NY Tax Notice

So, what information should you expect to see on a notice from the New York tax agency? Here’s a breakdown:

• New York State Department of Taxation and Finance heading: This name and the state logo should appear at the top of any notice you receive from the state.
• Description of reason for notice: Each notice will include a phrase or sentence at the top that describes the notice’s purpose, such as “Consolidated Statement of Tax Liabilities” or “You have a fixed and final unpaid tax debt.”
• Financial details: Each notice will outline in a table or tables the numbers owed based on the agency’s calculations.
• Key dates: Pay attention to any dates on the notice, such as the tax period for which the balance and/or penalties apply. Some notices may also include deadlines for responding or paying before further action is taken.
• Contact information: Many notices will provide a website or phone number to contact should you have further issues or need to talk to the tax agency about the information in the notice.
• Further details about the situation: Depending on the type of notice, it may also provide detailed information about why you’re receiving the notice and applicable laws related to the problem. Some notices may include definitions for terms within the notice that aren’t familiar, such as garnishment or tax warrant.
• What to do next: Not all notices will provide the next steps you should take, but some do. The notice may indicate what your options are if you have an outstanding balance but can’t afford to pay it, for example, or instructions on how to pay your taxes using the state’s online system.

NY notices can look pretty different based on what the problem is. Read through each notice carefully to ensure you’re not missing anything. Always talk to a tax attorney about what the notice means and what to do next.

Types of New York Tax Notices

New York sends out several different types of notices outlining what your issue is and how much money you owe. This section covers each category of notice you may receive and the sections found within those notices:

Assessment Notices

• Purpose: Assessment notices are sent to inform individuals or businesses about their tax liabilities based on the state agency’s assessment. These notices are common if you underreported your income or there were discrepancies in documents the state received and what you provided on your tax return.
• How to respond: Carefully read through the notice and verify that the assessments are correct. If not, explore your appeal options. If you agree with the assessment, make your payment based on the instructions provided.
• Consequences of ignoring the notice: Never ignore assessment notices. They include the amount that the state believes you owe based on its calculations. Doing nothing will only lead to increased penalties and further collection actions from the agency.

Assessment notices are often the first type of notice you’ll receive from the state when you owe unpaid taxes. Even though no serious action has been taken, do what you can to respond quickly and pay what you can. Contact the Law Offices of Stephen B. Kass, PC to discuss your assessment notice or to pursue an appeal.

Collection Notices

• Purpose: Collection notices request immediate payment from you for unpaid tax balances. These notices outline the debt you owe and state that you need to pay by a certain time to avoid further actions. Collection notices are common if you missed the deadline for paying taxes or haven’t taken any steps to try to pay off your tax debt.
• How to respond: Carefully review the debt amount to verify its accuracy. If you can, pay off the balance in full. This is the fastest way to get in good standing. If you can’t pay it off but can make smaller monthly payments, set up a payment plan with the state, which will keep you in good standing.
• Consequences of ignoring the notice: Don’t ignore collection notices. If you do nothing when you have a tax balance, you will continue to build penalties and interest. What’s more, the matter may escalate to a tax warrant or income execution (seizure), which you want to avoid.

Talk to a tax professional about your notice when you’re not sure what to do next or when you need assistance negotiating a payment arrangement.

Warrant Notices

• Purpose: A warrant notice is a more serious alert that the state has made your tax debt public record and created a lien, which can then lead to levies against your property. A tax warrant is essentially a civil judgment against you, according to the New York Department of Taxation and Finance, and it’s filed in the county clerk’s office and the Department of State.
• How to respond: Confirm that the details about your tax debt are correct on the notice. As soon as you can, pay off the debt or set up a payment plan to start paying it off. You want to do everything you can to prevent losing your property or wages.
• Consequences of ignoring the notice: After receiving a warrant notice you could have your assets seized or wages garnished by NY state. The state’s website also indicates that a warrant can impact your ability to obtain credit or buy and sell property. If you try to sell property while there is a lien against it, the DTF will have a right to the proceeds up to the amount of your tax debt plus collection costs, after taking into account any liens established before the tax warrant.

Getting a warrant notice in the mail is a serious matter that should be handled with your tax attorney. There are still steps you can take at this stage to avoid asset seizure, so never ignore the notice, and act quickly.

Income Execution Notices

• Purpose: Income execution is another term for wage garnishment. This happens when the state takes your wages to satisfy your outstanding tax debts. The income execution notice will include information about your tax liability and the state’s request that you voluntarily pay up to 10% of your gross wages, or 25% of your disposable earnings, from every paycheck.
• How to respond: Do what you can to immediately pay off what you owe. If you can’t, comply with the notice and send the state 10% of your paycheck every time you get paid. If you want to set up a payment plan, act quickly to reach out to the state to come to an arrangement.
• Consequences of ignoring the notice: If you do nothing after receiving an income execution notice, and you don’t pay the requested 10% of your paychecks, the state will then go to your employer to deduct the payments from your checks and remit it to the agency.

Unsure how to respond to an income execution notice? Talk to the team at the Law Offices of Stephen B. Kass, PC to get help with the right tax relief solution.

Driver’s License Suspension Notices

• Purpose: The state of New York has the right to suspend your driver’s license if you have at least $10,000 in overdue taxes. The Notice of Proposed Driver’s License Suspension lets you know that your license could be suspended because of your significant tax debt.
• How to respond: This notice doesn’t mean your license is already suspended. You have 60 days from the notice to take steps to resolve your tax debt and avoid suspension, such as paying off the balance, paying it down, or setting up a payment plan.
• Consequences of ignoring the notice: If you do nothing, the state will contact the DMV and recommend that your license be suspended. Then, the DMV will send you another notice, Order of Suspension or Revocation, 15 days prior to when your license will be suspended. You won’t be able to use your license if those 15 days go by without doing anything.

Driver’s license suspension impacts your mobility, so this is always something to avoid. When you receive a warning, act right away to avoid losing your license and other potential collection actions from the state. Work with Stephen B. Kass to take care of the matter quickly.

FAQs About NY Tax Notices

What is a consolidated statement of tax liabilities?

If you owe multiple types of taxes or taxes from multiple periods, you will receive a consolidated statement of tax liabilities from the DTF. The statement will list each type of tax, the amount due, interest, and penalties. Then, the notice will note your total debt due.

How does the DTF calculate interest on tax collection notices?

Interest is back-dated to the original due date of the return. If you are selected for an audit and the auditor assesses tax against you, you will also incur interest based on the due date of the return. The rates vary depending on the type of tax and they adjust quarterly.

What is a Notice of Intent to Refer Your Debt for Offset?

This notice tells you that the DTF plans to seize your state tax refund for unpaid state taxes. The DTF can also seize your IRS tax refund, and the agency collaborates with other states in a way that allows it to claim refunds or payments you receive from participating states to cover your tax liability.

What if you disagree with an audit notice?

If you fail an audit, you have the right to protest the results. The audit statement should outline your appeal rights and deadlines, but to be on the safe side, you should contact an attorney for help.

Contact Our Attorney for Tax Relief Assistance

New York State will take collection actions against you if you fail to pay your significant tax balance. After the state has tried collection actions such as penalties, sending warrants, income executions, and driver’s license suspension, it may then decide to seize and sell your property at auction.

The best thing you can do is act as soon as you receive any type of notice from NY State. Take steps to get your taxes resolved, such as setting up an installment agreement to pay it off over time and prevent further collection actions. You also may request an offer in compromise to settle your debt for less in certain circumstances.

The team at the Law Offices of Stephen B. Kass, PC is here to help you in whatever situation you’re dealing with. We will work with you on a plan to move forward and negotiate with New York State on your behalf to get your tax debts resolved.

Contact our office today to set up a consultation and talk through your tax notice with an expert.