Alabama Bank Levy Checklist

• Bank levy: The state orders your bank to freeze and transfer funds to pay the tax debt.
• Wage garnishment: The state orders your employer to withhold a portion of your

paycheck.

• Property lien: The state records a claim against your real estate or personal property.
• Business and professional license suspension: The state suspends your business

license or professional license.

• Offset: The state intercepts state tax refunds, lottery winnings, or other payments owed

to you.

Enforcement actions are binding on third parties, such as banks and employers. Financial institutions have 21 days following the date of service to comply with a levy.

Why the State Issued This or Requires This

The Alabama Department of Revenue typically initiates enforcement when specific administrative conditions are met. The state uses enforcement as a collection tool when standard notices and requests have not produced payment.

Standard triggers for enforcement

• A tax debt remains unpaid after the regular payment deadline.
• The Alabama Department of Revenue has sent a Final Notice Before Seizure, which

warns that further collection action will be necessary if full payment is not remitted within ten days.

• The taxpayer has not responded to the notices or made payment arrangements.
• The debt has been outstanding for several months or longer, and the assessment has

become final.

Alabama Code § 40-29-23 requires the Commissioner of Revenue to provide written notice of intent to levy at least 30 days before the levy is made, unless collection is in jeopardy. The specific form of enforcement used depends on several factors, including the type of tax owed, the size of the debt, and what information the state has about the taxpayer’s assets or income.

What Happens If This Is Ignored

Continuing to ignore enforcement actions typically results in escalation by the state. Once enforcement has begun, additional actions may follow.

Typical escalation patterns

• Additional enforcement methods may be used simultaneously, such as both a bank levy

in Alabama and wage garnishment.

• Penalties and interest continue to accrue on the unpaid balance.
• Additional administrative costs or fees may be added to the debt.
• The state may pursue collection through civil court proceedings.

• Federal tax refund offset may be initiated in coordination with the Internal Revenue

Service.

• Seizure of business assets or personal property may occur in extreme cases.

Enforcement actions can have significant impacts on daily financial operations, employment, and access to credit. Ignoring enforcement notices does not stop the process or reduce the debt.

What This Does NOT Mean

Understanding what enforcement does not mean helps clarify your actual situation and reduces unnecessary worry.

Enforcement does NOT mean

• You have been criminally charged with tax evasion or fraud. Enforcement is a civil

collection action.

• Your assets will immediately be seized. Enforcement follows legal procedures with notice

requirements.

• You have no options for resolving the debt. Payment plans, settlement agreements, and

other remedies exist.

• The debt cannot be disputed or negotiated. You can request a hearing or present

evidence to support your case.

• Your entire paycheck will be taken. Wage garnishment adheres to legal limits on the

amount that can be withheld.

Alabama final assessments that reach the Collection Services Division already have the full force and effect of a court judgment under state law. These are administrative assessments rather than actual court judgments entered by a circuit court.

Checklist: What to Do After Receiving an Enforcement

Notice or Identifying This Issue

Follow these steps in order if you have received an enforcement notice or believe enforcement

action is occurring

1. Locate and review the enforcement notice or document carefully.

Read the entire notice. Identify what type of enforcement action is being taken, the amount claimed, the tax period involved, and any deadline mentioned in the notice.

2. Verify the debt is actually yours.

Confirm that the tax year, tax type, and amount are correct. Verify if you believe any portion of the debt is inaccurate or has already been paid.

3. Gather all relevant tax documents and payment records.

Collect your tax return, correspondence from the state, payment records, bank statements showing any payments made, and any other documentation related to the debt.

4. Note the date you received the notice and any response deadlines.

Enforcement notices typically include deadlines for response or appeal. Write down the date you received the notice and any response deadlines clearly stated.

5. Contact the Alabama Department of Revenue.

Call or write to the Department of Revenue at the official address on My Alabama Taxes.

Explain that you have received an enforcement notice and want to understand your options.

6. Ask for a copy of the complete file.

Request a full copy of all documents in your tax file related to this debt, including the original assessment, all notices sent, and any correspondence.

7. Determine if you want to request a hearing or appeal.

As of October 1, 2025, you have 60 days from the date of mailing or delivery by personal service to appeal a final assessment to either the Alabama Tax Tribunal or circuit court.

8. Ask about payment options or resolution alternatives.

Inquire about payment plans, installment agreements, settlement options, or other ways to resolve the debt without continued enforcement.

9. Request information about your rights.

Ask for written information about your legal rights during enforcement, what you are required to do, and what protections apply to you.

10. Do not ignore any follow-up notices or communications.

If the state sends additional notices, correspondence, or documents, open and review them immediately.

11. Keep detailed records of all communications.

Document every phone call, letter, and conversation with the Department of Revenue, including dates, names, topics discussed, and any information provided.

12. Determine if you need legal or professional assistance.

Consider consulting with a tax attorney, Certified Public Accountant, or enrolled agent who can review your specific situation.

What Happens After This Is Completed

The Department of Revenue will acknowledge your contact and provide information about your tax account. Appealing a final assessment to the Alabama Tax Tribunal typically stays collection enforcement during the appeal process.

Circuit court appeals require you to either pay the assessment in whole or post a supersedeas bond equal to 125 percent of the evaluation to suspend collection. Taxpayers with a total net worth of $100,000 or less may qualify for a notable exception that allows them to file an appeal without first paying the assessment or posting a bond. Reaching an agreement with the state for a payment plan or settlement typically results in the state issuing a written contract outlining the terms.

Common Mistakes to Avoid

Avoiding these common errors can help prevent enforcement from escalating or becoming more complicated.

• Missing deadlines eliminates your right to challenge the enforcement. Enforcement

notices include deadlines for response, appeal, or hearing request that you must meet.

• Failing to respond to follow-up notices or communications may result in additional

enforcement actions or the loss of your right to respond. The Department of Revenue may send multiple notices during the enforcement process.

• Sending incomplete or incorrect information delays the resolution of your case. Provide

complete and accurate responses when the state asks for documentation or information.

• Making payments without referencing the account number or tax period prevents proper

credit to your account. Clearly identify the tax debt to which the payment applies when you make a payment during enforcement.

• Assuming enforcement will stop on its own leads to continued collection actions.

Enforcement actions continue until the debt is paid, an agreement is reached, or the matter is resolved through legal action.

Frequently Asked Questions

Can the state enforce collection without giving me notice first?

The Alabama Department of Revenue sends a Final Notice Before Seizure before initiating formal enforcement actions. This notice warns that further collection action will be necessary if full payment is not remitted within ten days.

Can I stop an Alabama bank levy once it has been issued?

An Alabama bank levy is an active enforcement action. To stop or reverse a levy, you must contact the Alabama Department of Revenue immediately.

Will my driver’s license be suspended for unpaid taxes?

The Alabama Department of Revenue has the apparent authority to suspend business licenses and professional licenses for unpaid taxes. Driver's license suspension is handled by the

Alabama Law Enforcement Agency primarily for traffic-related issues, not general unpaid state tax debt.

Can I request a payment plan to stop enforcement?

Payment plans and installment agreements are collection alternatives the state may offer.

Contact the Department of Revenue to inquire about payment plan options and their impact on ongoing enforcement.

What if I believe the tax debt is wrong?

If you believe the debt is inaccurate, you have the right to request a hearing or present evidence. Request that the state provide documentation on how the debt was calculated.

What amount will be withheld from my wages under a garnishment?

The employer is required to withhold 25 percent of the taxpayer’s gross wages for Alabama state tax collection. The garnishment remains in effect for subsequent pay periods until the total amount has been withheld and remitted.

How long will enforcement continue?

Enforcement typically continues until the debt is paid in full, an agreement is reached, or the matter is resolved through legal proceedings. The Alabama Department of Revenue has a minimum of ten years to collect a tax assessment.

Can I appeal an enforcement action?

You have the right to appeal a final assessment. As of October 1, 2025, you have 60 days from the date of mailing or delivery by personal service to appeal.

Closing

State enforcement is a serious collection action, but it follows specific administrative steps and procedures. Understanding what enforcement means, why it has been issued, and what your options are helps you respond appropriately to your situation.

The most critical first step is to contact the Alabama Department of Revenue, review all relevant documents related to your debt, and understand the enforcement action being taken against you. From there, you can explore options for resolving the debt, whether through payment, payment plans, appeals, or other remedies the state may offer.

Facing State Tax Enforcement Action?

If you’ve received a notice related to sales tax or payroll tax enforcement, and aren’t sure how to respond, our team can help you understand your options and next steps.

We help with

• State enforcement notices and responses
• Sales tax audits, assessments, and collections
• Payroll & trust fund tax enforcement issues
• Penalty and interest reduction options
• Payment plans and state tax relief eligibility
• Representation before state tax agencies

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