Arizona State Tax Enforcement Decision Checklist

Arizona State Tax Enforcement Decision Checklist

Introduction

Arizona state tax enforcement represents the formal process the Arizona Department of

Revenue uses to collect unpaid taxes and ensure compliance with filing and payment obligations. When the Department takes enforcement action, the state has moved beyond standard billing procedures to pursue collection or compliance measures after initial notices did not resolve the issue.

What This Issue Means

State tax enforcement represents a formal collection or compliance action taken by the Arizona

Department of Revenue. The state has moved beyond sending a simple notice asking you to pay or file and is now taking active steps to resolve the tax issue.

Enforcement can include collection actions such as bank levies, wage garnishment, or property liens. Officials may require you to provide missing information, file an unfiled return, or respond to a discrepancy identified through third-party reporting.

Why the State Issued This or Requires This

The Department initiates enforcement when a taxpayer does not respond to collection notices within a specified timeframe, a tax payment remains unpaid after standard billing procedures, or a return is not filed after the state sends a notice of non-filing. The state also takes action when a taxpayer’s reported income does not match information received from employers or other sources, or when a previous agreement or payment plan has not been followed.

What Happens If This Is Ignored

If you do not respond to or take action on the notice, the state may continue or escalate its actions. Bank accounts or wages may be levied once legal authority is in place. However, the

Department attempts to contact you and offers you the option to pay voluntarily before taking enforced collection action.

Property liens may be filed against your home or other real estate. The state may refer your case to a collection agency or attorney for further action.

What This Does NOT Mean

An enforcement notice does not automatically mean criminal charges will be filed against you.

The state has not frozen all your accounts or taken all available income.

Checklist: What to Do After Receiving an Enforcement

Notice or Identifying This Issue

• Step 1: Read the Notice Carefully

Review the entire notice or letter from the Department. Identify the tax year, the type of tax owed or action required, the amount if stated, and any deadline mentioned.

• Step 2: Verify Your Personal and Tax Information

Confirm that the notice matches your name, Social Security number or federal employer identification number, address, and tax year. Check whether the tax type matches your situation.

• Step 3: Review Your Tax Records

Locate your filed return for the year in question if you filed one. Find records of any payments made toward this tax debt.

• Step 4: Determine Whether You Dispute the Tax Amount or Reason for

Enforcement

Assess whether you believe the tax amount is correct. Determine whether you disagree with the state’s reason for enforcement.

• Step 5: Contact ADOR Directly

Call the Arizona Department of Revenue at the number listed on your notice. If no phone number appears, visit the official website to find the appropriate contact number for your issue.

• Step 6: Ask About Payment Options

During your contact with the Department, inquire whether you can resolve the issue through a payment arrangement or by filing and paying. Ask what information the state needs from you and what the deadline is for providing it.

• Step 7: Respond to the Notice in Writing if Required

Check the enforcement notice for any requirement to respond by a specific date. If a response is required, prepare a written response that includes your name, the tax year, the notice date, and a clear statement of your position.

• Step 8: File Any Missing Return

If the enforcement action relates to a missing return, file the return for the year in question. Complete the return using the best information available to you.

• Step 9: Make a Payment If Able

If you owe the amount stated in the notice and can pay it, contact the Department to arrange payment. Ask about available payment methods and obtain a confirmation number.

• Step 10: Document All Communication

Keep a record of every conversation, letter, and document you send to or receive from the Department. Note the date, time, the name of the person you spoke with, if applicable, and the substance of the communication.

• Step 11: Follow Any Agreement or Action Plan

If you have agreed to file a return, make a payment, or provide information by a specific date, complete that action by the deadline. If circumstances change and you cannot meet the deadline, contact the Department as soon as possible to explain and request an extension.

• Step 12: Review Follow-Up Notices

After you have taken action, watch for follow-up correspondence from the Department.

These may confirm that your case has been resolved, request additional information, or indicate that enforcement action is continuing.

What Happens After This Is Completed

After you respond to the notice or take the action required, the Department reviews your response or payment. When you have provided the information requested, filed a missing return, or made a payment arrangement, the state processes your submission.

The state sends a notice confirming receipt and the status of your case. Resolved enforcement actions result in a written confirmation sent to you.

Common Mistakes to Avoid

• Ignoring the notice allows the state to proceed with enforcement, which escalates the

situation and makes resolution more difficult.

• Missing the deadline results in additional enforcement measures or the loss of specific

options if the notice includes a deadline for response or action.

• Sending incomplete information delays resolution or requires you to resubmit if the state

requests specific documents or information.

• Not keeping copies of everything makes it difficult to prove you took action if questions

arise later.

• Assuming the notice will go away is incorrect because enforcement notices do not

expire, and the state continues collection efforts until the matter is resolved.

• Not asking about available options means many taxpayers do not realize that payment

plans, dispute procedures, or other administrative options may be available.

Frequently Asked Questions

Can I dispute the amount owed if I receive an enforcement notice?

Yes, you retain the right to dispute the underlying tax liability according to Arizona tax law.

Contact the Department to ask about the dispute process, which varies depending on whether you are disputing the amount, whether you filed a return, or the type of tax involved.

Will my wages be garnished immediately after I receive an enforcement notice?

Not necessarily; wage garnishment requires legal authority that the state obtains after the enforcement process has begun. Responding promptly reduces the likelihood of garnishment.

Can I set up a payment plan if I owe the amount listed in the enforcement notice?

Contact the Department directly to ask about payment plan options, which may depend on the amount owed, your payment history, and other factors. The state may be willing to hold enforcement action while you establish a plan.

What should I do if I believe the notice was sent in error or applies to someone else?

Contact the Department immediately by phone and in writing with your name, the notice date, and a clear explanation of why you believe the notice is in error. Include any supporting documentation and ask them to investigate and confirm the correct information.

How long does the enforcement process take?

Arizona tax law does not publish specific timeframes for the entire enforcement process. The time required depends on the type of enforcement action, whether you respond and cooperate, the complexity of your case, and the current Department workload.

Can a tax professional or representative help me respond to an enforcement notice?

Yes, you may hire a tax professional, attorney, or other representative to communicate with the

Department and help resolve the matter. If you do, notify them in writing and provide your representative's contact information so the state can communicate directly with your representative.

What happens if I cannot pay the full amount owed?

Contact the Department to discuss options, including a payment plan or an offer in compromise, if the liability is deemed uncollectible or the administrative costs of collection exceed the liability amount. The state evaluates each situation individually.

Does enforcement action appear on my credit report?

Tax liens no longer appear on credit reports as of April 2018, when the three major credit bureaus removed all tax liens from consumer credit reports. While tax liens remain public record and may affect your ability to obtain credit, they do not appear on credit reports and do not directly impact credit scores.

Can the statute of limitations prevent the state from enforcing a tax debt?

Arizona has dual limitation periods for tax collection, with tax debt obligations extinguished 10 years after the tax amount becomes final, unless an exception applies. The Department has 6 years to file suit or levy to collect unpaid taxes, making this a complex area of law in which the circumstances of your case matter.

Closing

Receiving an enforcement notice from the Arizona Department of Revenue is stressful but manageable with prompt and careful action. Understanding what enforcement means helps you respond appropriately. The steps are reading the notice carefully, understanding what is required, contacting ADOR directly, and taking the action specified by the deadline.

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.