Stages of Collection
The department’s collection process often begins with the proposed assessment (AR-80). The proposed assessment lists the tax type, tax period, due date and amount due. An explanation for the billing also accompanies this stage of the process.
(If you file a tax return and indicate a balance is owed, but don't pay that amount, the collection process will begin with a demand notice (AR-40). See below for more information.)
Always review the tax type, tax period and due date on the proposed assessment. The bill should be verified against your records, and any discrepancies should be addressed as quickly as possible.
You may protest a proposed assessment from the department by sending a written request and a copy of the bill to the department within 60 days of the bill date. The protest request letter should detail the reason for your protest and be signed and dated.
To protest only the penalty, use the same process. The protest letter should also include the specific reason for protesting only the penalty.
If you do not contact the department by the due date, Indiana law requires the department to advance the collection process. You waive your right to protest if you do not respond at the proposed assessment stage.
If you file a tax return and indicate a balance is owed but don't pay that amount, the department's collection process begins with a demand notice for payment (AR-40). In addition, if you do not timely protest a proposed assessment or your protest of a proposed assessment is denied in whole or in part, you will receive a demand notice for payment (AR-40) for the balance due.
This stage of the process allows only 20 days to respond. If you are unable to pay your tax bill, you must contact the department before the due date to discuss payment arrangements to avoid moving to the next stage of collection. If you believe you have a significant reason why you cannot make the payment by the due date, please contact the department before the due date to discuss possible remedies available to you. If you fail to pay or contact the department by the due date, the liability becomes a collectable judgment against you.
If you wish to make payment arrangements or wish to address an issue related to the demand notice, please call the department at (317) 232-2165. You also may contact the department via fax at (317) 234-4161 or by writing to:
Indiana Department of Revenue
P.O. Box 595
Indianapolis, IN 46204
Any correspondence with the department must occur within the 20-day response period. The demand notice for payment (AR-40) does not give a taxpayer the right to dispute the underlying tax liability. If you wish to dispute the tax liability on the demand notice for payment (AR-40), you must pay the amount owed before the 20-day period expires and request a refund for the disputed amount.
If your account reaches the warrant stage, you must pay the total amount due or accept the expense and consequences of the warrant. Although this is not a warrant for your arrest, the information will appear on a credit report or title search and becomes a lien on your property. The warrant is filed with all county clerk’s offices in which you have assets.
The warrant can go to either a sheriff or collection agency.
The sheriff will collect your total balance, which could include:
- the tax due,
- penalties assessed,
- interest assessed,
- clerk’s costs, and
- agency fees.
The sheriff may choose any of the following methods of collection:
- sell your property at an auction,
- garnish your wages, or
- levy your bank account.
The collection agency will collect your total balance and may choose the following methods of collection:
- garnish your wage, or
- levy your bank account.
Any taxpayer (business or individual) who has outstanding liabilities that have been filed as a lien in the county clerk’s office will have Indiana Department of Revenue tax liens placed on any and all vehicle titles, which are titled in his or her name and or Social Security number. For more information regarding a state tax lien on a vehicle title, please contact the Compliance Check Unit at (317) 232-5977.