Avoiding and resolving a tax warrant.

Aug. 17, 2009

You’ve been contacted by your county sheriff, informing you that the Indiana Department of Revenue has filed a tax warrant for your tax debt with the county clerk’s office. Now your tax debt is a public record, open to your competitors, the news media and your creditors.

And now the sheriff is within full legal rights to garnish your wages, levy your bank account or even auction off your property.

Okay, so where do you go from here? Well, let’s rewind and review how you can avoid getting to this point.

First off, the sheriff knocking at the door is not the first notification a business receives indicating it owes a tax debt. The Indiana Department of Revenue generally begins the collection process on a tax debt first with a 45-day notice, mailed directly to the address the Department has on record. This notice explains that the business – or individual taxpayer – has 45 days to either protest the bill (which includes proving the person or business doesn’t owe the tax debt), to pay the bill in full or to make payment arrangements. To make payment arrangements, you may call the Indiana Department of Revenue at (317) 232-2165.

If the business or individual does not take any of these actions within 45 days of the notification, then a 10-day notice is issued, which is an official tax bill. If this bill amount is not paid within 10 days of the date on the notification, then the tax debt is recorded with the business’ or individual’s county clerk’s office as a tax warrant – and it becomes a public record. From that point, the tax debt is referred to the sheriff, or to a professional collection agency for action. 

And when it gets to that point, the sheriff or the collection agency has the leeway under Indiana law to garnish wages, levy bank accounts or even hold an auction to sell off property to satisfy the tax debt.

But if the sheriff or collection agency has contacted you, your opportunities to avoid a warrant have passed. So, where do you go from here? Well, it’s like most other debts, you will need to resolve it. And you can start with contacting the sheriff or collection agency, depending on which of these has made contact with you, and work out a payment arrangement.

Believe us, we would much rather work with you on a payment arrangement than have to garnish your wages, or levy your bank account. These steps are never our preferred approach to resolving a tax debt.

So, if you’ve been issued a tax warrant, don’t let the sun set on it. Get busy now to resolve it. You’ll feel better knowing you’re on your way to correcting the matter.

For more information on this topic, visit our New and Small Business Education Center for the latest podcast on tax warrants. Simply click here.

If you would like to submit a question or topic suggestions, please send them to feedback@dor.in.gov.