New York State Tax Warrant – Know Your Rights & Settlement

As tax professionals, we understand the fear and frustration that comes along with an NYS tax warrant. Finding out that property and assets are on the line puts a tremendous amount of pressure on anyone. The best course of action is to come to a full understanding of the New York State Tax Warrant. Know the powers that the warrant issues the State of New York, and how they use those powers in the collection of tax debt. Learn your rights as a taxpayer, and how to deal with a tax warrant from NY.

Served With A New York State Tax Warrant – Time To Get Informed

What Exactly Is A New York State Tax Warrant?

If someone owes the State of New York files and fails to pay taxes or fails to file and owes, the state may serve them with a tax warrant. The State of New York practices an aggressive approach to tax collection, and tax warrants aren’t uncommon.

As the New York State Department of Taxation and Finance explains it, “A tax warrant is a legal action against you and creates a lien against your real and personal property.” It is the equivalent of the IRS’ Federal Tax Lien.

What Takes Place After The State Of New York Issues A Tax Warrant?

The language makes it clear that the State of New York is taking some kind of legal action against the taxpayer. It also explains that the legal action creates a lien against the taxpayer.

By creating the lien, the State of New York has the power to place a levy on your bank account. Wage garnishment is another option for the state to pursue. In some cases, the State of New York will seize and sell your property.

While this certainly appears to be the worst of it, a couple of other actions are also taken. The warrant creates a public record declaring that you owe taxes to the State of New York. The court then files the warrant with your local county clerk and the NYS Dept. of State.

The Process Of Issuing A New York State Tax Warrant

Before New York State issues a tax warrant, they always attempt to notify the taxpayer by mail. You should receive a Notice and Demand for Payment. The notice will explain that you have 21 days to pay your tax liability in full before the State of New York takes legal action against you.

Once the deadline for paying passes according to the Notice and Demand for Payment, the State of New York will execute a tax warrant. The warrant goes to the office of the county clerk in the county you live in.

The New York State Tax Warrant Collection Process

When a tax warrant comes into effect in New York State, it allows an officer of the Department of Taxation and Finance several methods of enforcement. The lien itself prevents the sale of any real estate or other significant property that has a warrant attached to it.

Depending on the amount of tax debt, the officer may pursue one of the following courses of action:

• Issue A Bank Levy – Any accounts with financial institutions where you hold money can be seized. This is often the first course of action an officer will take.
• Apply Income Execution – Also known as wage garnishment. A New York State Tax Warrant gives the power to take earnings straight from your paycheck.
• New York Driver’s License Suspension – Another option that a tax warrant allows the State of New York is a suspension of your Driver’s License. You may or may not be able to apply for a restricted license, depending on your circumstances.
• Seizure & Sale Of Real Or Personal Property – New York State can and will go after your personal property and real estate. With a tax warrant in effect, they have every right to seize and sell your property. This is typically a last resort practice, or if the state feels you will be unable to pay through financial earnings over time. They typically do not seize primary residences, although they reserve the right to.

How To Proceed Once The State Of New York Issues A Tax Warrant

Waiting until the State of New York serves a tax warrant is never the best course of action. Upon receiving the Notice and Demand for Payment, you should take action immediately. If you are unable to settle your tax liability in full, other arrangements are available. Be sure to look into a New York State Offer In Compromise. You may be able to avoid the tax warrant and settle for less than the full amount of your tax liability.

If a tax warrant is already in effect, there still are actions that you can take to help the situation. You may pay your tax debt in full at any time. Doing so will remove the lien against your property, and satisfy the tax warrant with both the County Clerk and the New York State Department of State.

Most taxpayers won’t come to the point of a tax warrant if they have the ability to pay their taxes in full. If an officer of the New York State Department of Taxation and Finance is taking collection action against you, contact them immediately or hire a tax attorney to contact them for you. You should be able to come to a payment arrangement or at least notify the agent that you will be submitting an Offer in Compromise, and they may delay collection action on your case. Honor the arrangement and no further collection action should be taken.

Conclusion – Contacting The New York State Department Of Taxation And Finance

Facing a tax crisis is a challenge, and a New York State Tax Warrant qualifies by any definition of the term. Our goal here at TRP is to arm you with the necessary information to handle such circumstances even if you cannot hire someone to help you. If you don’t feel comfortable dealing with the warrant alone, don’t hesitate to contact us. We will be at your side and ready to back you up. Remember, the worst thing you can do is ignore the New York State Department of Taxation and Finance. Contact TRP via the form or call us at (888) 515-4829 and we will be happy to call them for you.