Answers to Your NYS Tax Warrant Questions
Perhaps you have received a NYS tax warrant in the mail or have questions about your New York State tax debt problems.
Before you make the mistake of handling this difficult tax problem on your own, take the time the read this entire article on NYS tax warrants.
The article answers the most common questions about a NYS tax warrant that I encounter as a New York tax attorney.
What is a NYS Tax Warrant?
A NYS tax warrant is a judgment against you that is filed by either New York State or NYC as a result of owed back taxes.
Whether you owe taxes to New York State or New York City, New York State will enforce the tax warrant under the tax law.
What is the Cause of a NY Tax Warrant?
A NYS tax warrant is a result of back taxes owed by you or your business to the New York State Department of Taxation and Finance.
The most common causes of New York State tax warrants are individual income taxes and sales tax in the case of businesses.
Why Did NYS Issue a Tax Warrant?
When your tax debt becomes due and owing, the deficiency is “assessed” against you. The filing of your tax return creates the assessment of the tax.
If you fail to file a tax return, New York State may still assess a tax debt against you based upon based upon income records.
If you do not pay the tax debt, New York State may begin enforcement action against you. Collection action begins with a notice of deficiency if you owe New York State income tax or a notice of determination if you owe sales and use tax.
The notice of deficiency as well as the tax warrant will be sent to your last known address.
The amount shown in the notice of deficiency or determination will be assessed against you unless you file for a hearing within 90 days from receipt of the notice.
If you fail to file for a hearing to dispute the assessment, New York State may issue a tax warrant for the amount indicated in the notice.
What are the Steps to Issuing a Tax Warrant ?
Before the NYS tax warrant is issued, you will receive a Notice and Demand for Payment.
You will have 21 days to pay the amount due and owing before New York State begins collection action against you.
If you ignore the Notice of Demand for Payment, the New York State Department of Taxation and Finance will issue a tax warrant.
A tax warrant is a powerful legal tool as it allows an authorized New York State tax agent to levy upon and sell your real and personal property.
Where is a NYS Tax Warrant Filed?
It is recorded at the county clerk’s office in the county in which you live or own real estate and is also filed with the Department of State.
The county clerk will file ( also known as “docketing”) the lien against you, along with penalties and interest.
The tax warrant legally creates a lien against any personal property as well as real estate that you own once it is recorded in the county clerk’s office.
The tax warrant becomes a matter of public record and is easily accessible by title searchers as well as the credit reporting agencies. You will be unable to sell your real or personal property without first paying the tax debt that is owed.
How Long Does NY Have to Issue a Tax Warrant?
A tax warrant must be filed within 6 years from the date that the tax is assessed.
If New York State does not issue the tax warrant within 6 years from the date of assessment, it is extinguished.
How Long Does NYS Have to Collect on the Tax Warrant ?
The New York State Department of Taxation and Finance has 20 years from the date that the tax warrant could have been filed to collect on the tax liability.
Does New York State have to go to Court to seize my property?
No. Once the tax warrant has been docketed (filed) at the county clerk’s office, the New York State employee may begin legal enforcement action against you.
A court proceeding is not necessary to collect the back tax debt that has been assessed against you, along with penalties and interest.
Will Moving Out Of NY Help Me?
No. Under the Full Faith and Credit Clause of the United States Constitution ( Article IV, Section 1), other states are legally obligated to respect the judicial records and proceedings of other states.
In other words, the NYS tax warrant will follow you to any other state where you live and the state in which you now live will enforce the warrant against you.
I often receive phone calls from clients in sunny Florida or other states, who have to deal with the consequences of a New York tax debt. You can run but you can’t hide.
How Does NYS Enforce A Tax Warrant?
A tax warrant authorizes an officer of the New York State Department of Taxation and Finance to pursue aggressive collection activity against you.
If a tax warrant issued against you, it common for a NYS agent to appear at your home to “discuss” your past due tax problem.
The agent will likely pressure you into entering into an unaffordable payment agreement.
If you do not comply with his or her requests, there are typically 4 ways that the New York State of Department of Taxation and Finance will enforce a tax warrant:
- Income Execution : Your wages will be garnished until such time that the tax liability is satisfied. An income execution is an ongoing levy and usually will not be released without a properly structured agreement with the New York State Department of Taxation and Finance.
- Bank Levy: Your bank account or bank accounts will be seized up to the amount of your back tax debt, including penalties and interest.
- Driver’s License Suspension : Depending upon the size of the tax debt, your New York State driver’s license may be suspended. In order to drive again, you will have to either pay your tax debt or apply for a conditional license with the Department of Motor Vehicles.
- Sale & Seizure : New York State has the authority to seize real and personal property that you own. Although it not as common as income execution, bank levy, and/or driver’s license suspension, it certainly has been a remedy that has been pursued by the Department of Taxation and Finance.
We Can Help Taxpayers Throughout New York
The worse thing that you can do with tax problem is ignore it.
In our practice, we often see a NYS tax warrant and IRS problems go hand and hand.
It is often advantageous to you to handle your New York & IRS tax problems at the same time to achieve the best possible tax debt settlement.
New York State is highly aggressive in collecting back taxes that is owed. You may be a candidate to reduce your tax liability through an offer in compromise.
Every solution to a tax problem begins with an assessment from an experienced New York tax attorney Charles Rosselli.
Do not mistake of hiring some of these so-called “tax resolution” firms making false promises about settling your tax debt.