The tax collection in Alabama is managed by the Alabama Department of Revenue (ALDOR), the state’s principal revenue agency. Led by the revenue commissioner, the department has legal authority under Alabama law to pursue unpaid taxes using various enforcement methods. These include tax collection actions such as property liens, bank levies, wage garnishments, and other tools that may significantly affect individuals and businesses.
The Alabama Department of Revenue often acts more quickly and aggressively than the IRS. While the IRS typically sends multiple notices over several months, ALDOR’s timeline is shorter, giving taxpayers fewer chances to dispute assessments or arrange payments before enforcement begins.
Understanding this process helps Alabama residents make informed choices and avoid the consequences of unresolved tax debts. This guide outlines enforcement and the options available to resolve outstanding obligations.
The Alabama Department of Revenue follows a structured process that begins when it identifies a tax liability and continues through enforcement if the amount remains unpaid. Understanding this cycle is essential for taxpayers facing state tax issues to avoid escalating penalties and legal actions.
The collection process begins once ALDOR identifies a tax liability. This may occur in several ways:
In all cases, ALDOR issues a preliminary assessment that outlines the tax owed, including any applicable penalties and accrued interest. This notice provides formal debt documentation and serves as the taxpayer’s first opportunity to respond. Alabama law requires that assessments be issued within three years of the return's due date or filing date, whichever is later.
Taxpayers have 30 days from the date of the preliminary assessment to either submit full payment or file a petition for review. If no action is taken, the amount becomes final and legally enforceable.
The tax amount becomes a final assessment after 30 days have passed with no action taken. At this stage, the obligation has the same effect as a court judgment. ALDOR then refers the case to its internal Collection Services Division, which manages enforcement steps moving forward.
Before initiating formal enforcement, ALDOR sends a Final Notice Before Seizure to the taxpayer’s last known address. This letter gives a 10-day window to make payment or contact the department. If the department receives no response, it may proceed with garnishments, levies, or liens.
For detailed tax information, including taxpayer rights and procedures, refer to the Alabama Department of Revenue's official Taxpayers' Bill of Rights.
Wage garnishment is one of the Alabama Department of Revenue’s most direct methods of collecting delinquent taxes. Once a tax becomes final and remains unpaid, ALDOR can take action without further court involvement. This process allows the department to withhold a portion of a taxpayer’s wages to satisfy a tax debt.
Garnishment typically follows these steps, beginning shortly after the Final Notice Before Seizure:
Under Alabama law, up to 25% of employees' gross wages may be garnished per pay period. The garnishment remains in effect until the entire balance is paid off, including interest and fees.
The timeline for wage garnishment can progress quickly:
Because garnishment may begin with only a single notice, responding to any ALDOR communication without delay is crucial.
There are limited ways to reduce or stop wage garnishment once it has started:
A bank levy allows the Alabama Department of Revenue to seize funds directly from taxpayers' financial accounts. Unlike wage garnishments, which recover debt over time, bank levies result in immediate withdrawal of available balances. This approach is often used when other collection efforts have failed or the Revenue Commission deems swift action necessary.
The process typically follows these steps:
Alabama allows the seizure of the entire account balance—up to the total amount of tax liability—at the time the levy is imposed, unlike some states.
When a levy is applied:
Future deposits made after the account is frozen are not subject to the levy unless a new garnishment is issued.
Bank levies may apply to nearly all types of financial accounts, including:
Depending on the account type and applicable exemptions, funds associated with specific property—such as escrow or retirement accounts—may be protected.
If you receive a bank levy notice, here are limited ways to stop or reverse the action:
ALDOR does not offer a formal hardship appeal process for bank levies, but its Collection Services Division may consider exceptional circumstances in unique cases.
A tax lien is a legal claim by the Alabama Department of Revenue against a taxpayer’s assets when outstanding taxes remain unpaid. Unlike garnishments and levies, which actively seize assets or income, tax liens notify creditors that the state has a secured interest in the taxpayer’s real property or other assets.
ALDOR may file a tax lien under the following conditions:
Liens are typically recorded with the probate office in the county where the taxpayer owns property. Sometimes, ALDOR may file with the Secretary of State if personal property is involved. Once recorded, the lien becomes public and may affect credit, loans, or asset transfers.
In extreme cases, a tax lien may lead to a tax lien auction, where the state sells an interest in the asset to recover unpaid debt. The process may include the following:
The taxpayer may still have a redemption period to reclaim the property by paying the full amount plus interest.
Taxpayers have several options for removing or addressing a tax lien:
Beyond garnishments, levies, and liens, the Alabama Department of Revenue may pursue additional enforcement actions to collect delinquent taxes. These actions may involve legal, professional, or financial consequences affecting individuals and business entities.
ALDOR has the authority to deny, suspend, or revoke licenses in cases where collection of tax debt is at risk:
These measures are costly and may limit a taxpayer’s ability to work or manage a business legally.
In severe cases, ALDOR may initiate actual personal or commercial property seizure. This step is typically reserved for large debts or chronic noncompliance.
Taxpayers are responsible for safeguarding their assets by resolving debts early. Once the seizure begins, reversing without full payment becomes difficult.
The statute of limitations defines how long the Alabama Department of Revenue has to assess or collect unpaid taxes. Understanding these timelines is essential for taxpayers planning and resolving outstanding liabilities.
The state has limited time to assess additional tax once a return has been filed:
These provisions also apply to assessments for delinquent property taxes and other unresolved liabilities.
Even after taxes are assessed, ALDOR has a fixed period to collect delinquent property taxes and other amounts owed:
Some events can pause—or “toll”—the collection window, extending how long ALDOR can pursue a balance:
For additional information about how these rules apply to your situation, refer to Alabama Code Sections 40-2A-7, 40-29-20, and 40-29-52 or consult a qualified tax professional.
How to Respond to a Collection Notice from ALDOR
Receiving a notice from the Alabama Department of Revenue can be daunting, but responding swiftly and intelligently can help protect your rights and offer up more settlement possibilities.
ALDOR reminds taxpayers, “If you intend to appeal your final assessment, you must do so within 30 days from the date of mailing or personal delivery.”
Phone Numbers
Mailing Address
Alabama Department of Revenue
Collection Services Division
P.O. Box 327790,
Montgomery, AL 36132-7790
Appeal Submissions
Online Portal: My Alabama Taxes
Always keep detailed records of any communication with ALDOR, including dates, names, and confirmation numbers.
If you are unable to pay your Alabama tax bill in full, ALDOR has installment plans that allow you to pay over time while avoiding immediate enforcement actions.
To request a payment plan with ALDOR, the following criteria typically apply:
ALDOR notes, “Payment plans are created at ALDOR’s discretion” under Alabama Code § 40-2A-4(b)(6).
The process depends on whether you request a basic or formal plan:
Submitting the form does not guarantee approval. Incomplete forms may be rejected, and collection may continue.
Installment plans come with strict terms. Here’s what you need to know:
Missing a scheduled payment or failing to comply with plan terms may result in:
The Alabama Department of Revenue (ALDOR) initiates the collection process after detecting unpaid taxes in various ways, including filing returns with a balance due, missing tax filings, and audit results that disclose additional responsibility. Once a potential debt is detected, ALDOR issues a preliminary assessment outlining the amount owed, including any applicable penalties and interest.
Taxpayers have 30 days from the date of notice to either pay the full amount or submit a petition for review if they believe the assessment is wrong. If no action is taken within that time frame, the preliminary assessment becomes final and legally binding, allowing ALDOR to initiate official collection actions such as garnishment, levies, or liens.
Ignoring a final notice before a seizure drastically reduces your alternatives. ALDOR is not required to provide any additional reminders prior to taking action. Once the 10-day period passes, enforcement may begin without further notice. This notice represents your final opportunity to prevent forcible collection.
If no payment or arrangement is made by the deadline, ALDOR may proceed as follows:
The only way to end these measures is to respond quickly—by paying the outstanding balance, arranging a payment plan, or seeking professional assistance. After enforcement begins, alternatives become more limited, and outcomes are more difficult to reverse.
Yes. The Alabama Department of Revenue can issue a writ of garnishment on your employer without going to court. This judicial order requires your employer to withdraw a portion of your salary and transfer it to ALDOR to assist you in paying your tax debt.
Under Alabama law, ALDOR may garnish up to 25% of your gross wages per pay period. The garnishment remains in effect until the entire sum is paid. Responding swiftly to tax notices is critical to avoiding automatic wage withholding, which can begin shortly after a final assessment and a single notice.
Yes. ALDOR can freeze and seize funds in your personal, commercial, or joint bank accounts. The department collects delinquent taxes directly from your financial institution through a bank levy. The garnishment serves to freeze the account balance. Once imposed, ALDOR cannot accept future deposits. Handling tax bills early is crucial, as they can occur unexpectedly and hinder your access to finances.
In most circumstances, the Alabama Department of Revenue has 10 years to collect the obligation after a tax is assessed or a lien is issued. This period is referred to as the collection statute of limitations.
Certain occurrences, however, can cause a pause—or "toll"—in these 10 years. These include declaring bankruptcy, engaging in legal appeals or litigation, and leaving the state of Alabama. When the clock is paused, ALDOR's collection period is essentially extended.
Yes. If you can't pay your entire tax bill immediately, ALDOR might let you sign up for an installment plan. This arrangement allows you to make consistent payments over time while avoiding more severe collection methods.
Approval is not automatic; your financial situation and the type and amount of tax payable determine it. Even with a payment plan, interest and penalties will continue to accrue, and you must maintain compliance with all current tax files and payments during the arrangement.
Responding swiftly to any ALDOR alert is critical. Each notification has precise dates and repercussions, so failure to comply may result in garnishment, levies, or asset seizure.
Here's what you need to do:
Taking action before the deadline allows you to remedy the issue without automatic enforcement.
The tax collection in Alabama is managed by the Alabama Department of Revenue (ALDOR), the state’s principal revenue agency. Led by the revenue commissioner, the department has legal authority under Alabama law to pursue unpaid taxes using various enforcement methods. These include tax collection actions such as property liens, bank levies, wage garnishments, and other tools that may significantly affect individuals and businesses.
The Alabama Department of Revenue often acts more quickly and aggressively than the IRS. While the IRS typically sends multiple notices over several months, ALDOR’s timeline is shorter, giving taxpayers fewer chances to dispute assessments or arrange payments before enforcement begins.
Understanding this process helps Alabama residents make informed choices and avoid the consequences of unresolved tax debts. This guide outlines enforcement and the options available to resolve outstanding obligations.
The Alabama Department of Revenue follows a structured process that begins when it identifies a tax liability and continues through enforcement if the amount remains unpaid. Understanding this cycle is essential for taxpayers facing state tax issues to avoid escalating penalties and legal actions.
The collection process begins once ALDOR identifies a tax liability. This may occur in several ways:
In all cases, ALDOR issues a preliminary assessment that outlines the tax owed, including any applicable penalties and accrued interest. This notice provides formal debt documentation and serves as the taxpayer’s first opportunity to respond. Alabama law requires that assessments be issued within three years of the return's due date or filing date, whichever is later.
Taxpayers have 30 days from the date of the preliminary assessment to either submit full payment or file a petition for review. If no action is taken, the amount becomes final and legally enforceable.
The tax amount becomes a final assessment after 30 days have passed with no action taken. At this stage, the obligation has the same effect as a court judgment. ALDOR then refers the case to its internal Collection Services Division, which manages enforcement steps moving forward.
Before initiating formal enforcement, ALDOR sends a Final Notice Before Seizure to the taxpayer’s last known address. This letter gives a 10-day window to make payment or contact the department. If the department receives no response, it may proceed with garnishments, levies, or liens.
For detailed tax information, including taxpayer rights and procedures, refer to the Alabama Department of Revenue's official Taxpayers' Bill of Rights.
Wage garnishment is one of the Alabama Department of Revenue’s most direct methods of collecting delinquent taxes. Once a tax becomes final and remains unpaid, ALDOR can take action without further court involvement. This process allows the department to withhold a portion of a taxpayer’s wages to satisfy a tax debt.
Garnishment typically follows these steps, beginning shortly after the Final Notice Before Seizure:
Under Alabama law, up to 25% of employees' gross wages may be garnished per pay period. The garnishment remains in effect until the entire balance is paid off, including interest and fees.
The timeline for wage garnishment can progress quickly:
Because garnishment may begin with only a single notice, responding to any ALDOR communication without delay is crucial.
There are limited ways to reduce or stop wage garnishment once it has started:
A bank levy allows the Alabama Department of Revenue to seize funds directly from taxpayers' financial accounts. Unlike wage garnishments, which recover debt over time, bank levies result in immediate withdrawal of available balances. This approach is often used when other collection efforts have failed or the Revenue Commission deems swift action necessary.
The process typically follows these steps:
Alabama allows the seizure of the entire account balance—up to the total amount of tax liability—at the time the levy is imposed, unlike some states.
When a levy is applied:
Future deposits made after the account is frozen are not subject to the levy unless a new garnishment is issued.
Bank levies may apply to nearly all types of financial accounts, including:
Depending on the account type and applicable exemptions, funds associated with specific property—such as escrow or retirement accounts—may be protected.
If you receive a bank levy notice, here are limited ways to stop or reverse the action:
ALDOR does not offer a formal hardship appeal process for bank levies, but its Collection Services Division may consider exceptional circumstances in unique cases.
A tax lien is a legal claim by the Alabama Department of Revenue against a taxpayer’s assets when outstanding taxes remain unpaid. Unlike garnishments and levies, which actively seize assets or income, tax liens notify creditors that the state has a secured interest in the taxpayer’s real property or other assets.
ALDOR may file a tax lien under the following conditions:
Liens are typically recorded with the probate office in the county where the taxpayer owns property. Sometimes, ALDOR may file with the Secretary of State if personal property is involved. Once recorded, the lien becomes public and may affect credit, loans, or asset transfers.
In extreme cases, a tax lien may lead to a tax lien auction, where the state sells an interest in the asset to recover unpaid debt. The process may include the following:
The taxpayer may still have a redemption period to reclaim the property by paying the full amount plus interest.
Taxpayers have several options for removing or addressing a tax lien:
Beyond garnishments, levies, and liens, the Alabama Department of Revenue may pursue additional enforcement actions to collect delinquent taxes. These actions may involve legal, professional, or financial consequences affecting individuals and business entities.
ALDOR has the authority to deny, suspend, or revoke licenses in cases where collection of tax debt is at risk:
These measures are costly and may limit a taxpayer’s ability to work or manage a business legally.
In severe cases, ALDOR may initiate actual personal or commercial property seizure. This step is typically reserved for large debts or chronic noncompliance.
Taxpayers are responsible for safeguarding their assets by resolving debts early. Once the seizure begins, reversing without full payment becomes difficult.
The statute of limitations defines how long the Alabama Department of Revenue has to assess or collect unpaid taxes. Understanding these timelines is essential for taxpayers planning and resolving outstanding liabilities.
The state has limited time to assess additional tax once a return has been filed:
These provisions also apply to assessments for delinquent property taxes and other unresolved liabilities.
Even after taxes are assessed, ALDOR has a fixed period to collect delinquent property taxes and other amounts owed:
Some events can pause—or “toll”—the collection window, extending how long ALDOR can pursue a balance:
For additional information about how these rules apply to your situation, refer to Alabama Code Sections 40-2A-7, 40-29-20, and 40-29-52 or consult a qualified tax professional.
How to Respond to a Collection Notice from ALDOR
Receiving a notice from the Alabama Department of Revenue can be daunting, but responding swiftly and intelligently can help protect your rights and offer up more settlement possibilities.
ALDOR reminds taxpayers, “If you intend to appeal your final assessment, you must do so within 30 days from the date of mailing or personal delivery.”
Phone Numbers
Mailing Address
Alabama Department of Revenue
Collection Services Division
P.O. Box 327790,
Montgomery, AL 36132-7790
Appeal Submissions
Online Portal: My Alabama Taxes
Always keep detailed records of any communication with ALDOR, including dates, names, and confirmation numbers.
If you are unable to pay your Alabama tax bill in full, ALDOR has installment plans that allow you to pay over time while avoiding immediate enforcement actions.
To request a payment plan with ALDOR, the following criteria typically apply:
ALDOR notes, “Payment plans are created at ALDOR’s discretion” under Alabama Code § 40-2A-4(b)(6).
The process depends on whether you request a basic or formal plan:
Submitting the form does not guarantee approval. Incomplete forms may be rejected, and collection may continue.
Installment plans come with strict terms. Here’s what you need to know:
Missing a scheduled payment or failing to comply with plan terms may result in:
The Alabama Department of Revenue (ALDOR) initiates the collection process after detecting unpaid taxes in various ways, including filing returns with a balance due, missing tax filings, and audit results that disclose additional responsibility. Once a potential debt is detected, ALDOR issues a preliminary assessment outlining the amount owed, including any applicable penalties and interest.
Taxpayers have 30 days from the date of notice to either pay the full amount or submit a petition for review if they believe the assessment is wrong. If no action is taken within that time frame, the preliminary assessment becomes final and legally binding, allowing ALDOR to initiate official collection actions such as garnishment, levies, or liens.
Ignoring a final notice before a seizure drastically reduces your alternatives. ALDOR is not required to provide any additional reminders prior to taking action. Once the 10-day period passes, enforcement may begin without further notice. This notice represents your final opportunity to prevent forcible collection.
If no payment or arrangement is made by the deadline, ALDOR may proceed as follows:
The only way to end these measures is to respond quickly—by paying the outstanding balance, arranging a payment plan, or seeking professional assistance. After enforcement begins, alternatives become more limited, and outcomes are more difficult to reverse.
Yes. The Alabama Department of Revenue can issue a writ of garnishment on your employer without going to court. This judicial order requires your employer to withdraw a portion of your salary and transfer it to ALDOR to assist you in paying your tax debt.
Under Alabama law, ALDOR may garnish up to 25% of your gross wages per pay period. The garnishment remains in effect until the entire sum is paid. Responding swiftly to tax notices is critical to avoiding automatic wage withholding, which can begin shortly after a final assessment and a single notice.
Yes. ALDOR can freeze and seize funds in your personal, commercial, or joint bank accounts. The department collects delinquent taxes directly from your financial institution through a bank levy. The garnishment serves to freeze the account balance. Once imposed, ALDOR cannot accept future deposits. Handling tax bills early is crucial, as they can occur unexpectedly and hinder your access to finances.
In most circumstances, the Alabama Department of Revenue has 10 years to collect the obligation after a tax is assessed or a lien is issued. This period is referred to as the collection statute of limitations.
Certain occurrences, however, can cause a pause—or "toll"—in these 10 years. These include declaring bankruptcy, engaging in legal appeals or litigation, and leaving the state of Alabama. When the clock is paused, ALDOR's collection period is essentially extended.
Yes. If you can't pay your entire tax bill immediately, ALDOR might let you sign up for an installment plan. This arrangement allows you to make consistent payments over time while avoiding more severe collection methods.
Approval is not automatic; your financial situation and the type and amount of tax payable determine it. Even with a payment plan, interest and penalties will continue to accrue, and you must maintain compliance with all current tax files and payments during the arrangement.
Responding swiftly to any ALDOR alert is critical. Each notification has precise dates and repercussions, so failure to comply may result in garnishment, levies, or asset seizure.
Here's what you need to do:
Taking action before the deadline allows you to remedy the issue without automatic enforcement.
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