If a New York State taxpayer fails to pay their tax bill and no longer has the right to appeal, the New York State Department of Taxation and Finance’s Collections and Civil Enforcement Division will assess the tax they say you owe and file a New York State Tax Warrant.
If you have an unpaid tax bill that is correct, your best option is to pay the tax debt owed in full as soon as possible. As a taxpayer takes time to pay the balanced owed, the balance continues to accrue penalties, and interest. If a taxpayer continues to delay paying the tax liability owed to New York State, civil enforcement actions may start and they may levy your account after they file a New York State Tax Warrant.
Civil enforcement actions are New York State Department of Taxation and Finance’s way of collecting unpaid tax bills. If a taxpayer continues to not pay the tax debt owed, the tax department has the power to:
- Issue Tax Warrants (basically a tax lien)
- Levy income and accounts (bank, broker, etc.)
- Seize property
A New York State Tax Warrant are a harsh legal action against the taxpayer. They are not only a public record filed with the New York Department of the State of the tax liability owed to the state, but also:
- Create a lien against property (used to collect on the debt owed through a levy, income execution, seizure and sale of personal property)
- Affect the taxpayer’s credit score. The tax department does not report tax warrants to credit agencies, but since tax warrants are a matter of public record, the information is made available to them and affects your credit score.
If you have a New York State Tax Warrant and own property, you may sell the property to cover your tax debts. However, in order to satisfy the lien, the funds received from the sale of the house must pay the tax debt owed in full to the extent you receive proceeds from the sale. After the debt is settled, the tax department will issue a Notice of Pending Warrant Satisfaction, and this document will be the proof that the lien is removed.
For taxpayers facing both a New York State Tax Warrant and bankruptcy, the tax department stops collection on individuals who file for bankruptcy. Though the tax department stops collection, the taxpayer may continue to receive documents about the tax debt owed.
Once the tax debt owed is paid in full, the tax department will notify the New York Department of the State who keeps track of the New York State Tax Warrant. This is the action needed to prove that the tax warrant has been satisfied, and the lien will be removed against your property.