Arkansas Active Collections Timeline Checklist

Arkansas Active Collections Timeline Checklist

Introduction

State tax enforcement occurs when the Arkansas Department of Finance and Administration takes action to collect unpaid taxes, pursue unfiled returns, or address compliance violations.

This can happen for several reasons: missed tax payments, unreported income, failure to file required returns, or other tax-related violations.

Enforcement actions are part of the state’s standard collection process and typically follow a documented administrative timeline. Understanding what state tax enforcement means—and what generally happens at each stage—can help you understand your options and responsibilities.

Ignoring an Arkansas tax enforcement notice can result in additional penalties, interest, wage garnishment, bank levies, or property liens. State enforcement does not mean immediate asset seizure or criminal prosecution in most cases. Still, it means the state has moved beyond routine notices to formal collection or compliance action.

What This Issue Means

State tax enforcement refers to formal collection or compliance actions taken by the Arkansas

Department of Finance and Administration against a taxpayer. These actions typically include written notices, liens, levies, wage garnishment orders, or demands for immediate payment.

Why the State Issued This or Requires This

The state initiates enforcement action when standard collection procedures have not resulted in payment or response. Common triggers include failure to pay taxes by the deadline, failure to file a required return, failure to respond to prior notices, or violation of state law.

What Happens If This Is Ignored

If an enforcement action is ignored, the state typically escalates collection efforts. This may include filing a certificate of indebtedness against your property, issuing a wage garnishment order to your employer, levying your bank account, or placing a hold on your state refunds.

Additional penalties and interest continue to accrue on unpaid balances. The longer an enforcement action remains unaddressed, the more difficult and costly the situation typically becomes.

What This Does NOT Mean

Receiving an Arkansas tax enforcement notice does not automatically mean criminal prosecution is pending. It does not mean your home will be immediately seized or sold, nor does it mean that all legal remedies or payment arrangements are unavailable to you.

Steps to Take After Receiving an Arkansas Tax

Enforcement Notice

Verify the Notice and Gather Documents

Locate the enforcement notice or letter from the state agency. Read the entire notice carefully, noting the date issued and any deadlines stated. Identify the tax year or periods involved. Note the total amount claimed due, including principal, penalties, and interest calculated at 10% per annum.

Verify the Accuracy of the Claim

Review the tax year listed on the notice against your own records. Confirm the amount of tax claimed versus what you believe you owe, and check whether you filed a return for that tax year.

Identify Your Contact Information and Next Steps on the Notice

Locate the name and address of the DFA office handling the matter. Find the phone number or contact information provided on the notice. Note any specific instructions for payment, response, or appeal. Identify the deadline for any required response or action.

Contact the Arkansas Department of Finance and Administration

Call or write to the contact address or number listed on the notice. The DFA Collections Office can be reached at 501-682-5000 or toll-free at 800-292-9829.

Document All Communications

Write down the date and time of any phone call. Record the name and title of the person you spoke with. Note the substance of the conversation. If corresponding by mail, keep copies of all letters sent.

Determine Your Payment or Response Options

Ask the DFA whether full payment is required or a payment plan is available. Arkansas Code authorizes installment agreements for certain tax liabilities: debts under $1,000 may qualify for payment plans, and individual income tax debts under $2,000 may qualify for 12-month electronic payment plans.

Address Existing Levies or Garnishments

If your wages are being garnished, contact your employer’s payroll department. Ask your employer for a copy of the garnishment order, and contact your bank for details if a bank levy has been placed.

Make a Payment or Arrange a Payment Plan

If paying in full, ask the state for the correct payment address and method. If arranging a payment plan, ask for written terms and the monthly amount.

File a Protest or Appeal if You Dispute the Claim

If you receive a notice of proposed assessment, you have 60 days from the date of the notice to file a written protest requesting administrative review. If you disagree with a final evaluation or other DFA action, you generally have 90 days to file a petition with the Arkansas Tax Appeals

Commission.

Common Mistakes to Avoid

Missing the deadline listed on the notice can result in additional penalties or escalated action.

Ignoring follow-up notices or letters from the DFA can result in wage garnishment, bank levies, or the filing of a certificate of indebtedness.

Not responding to the state, even if you disagree with the claim, is a mistake because silence does not stop enforcement. Sending incomplete or unclear information to the state may prevent the DFA from addressing your concern and may allow enforcement to continue.

Assuming a certificate of indebtedness will be automatically removed is incorrect because tax liens remain on your property record until the state files a formal release. Not asking about payment plan options is a mistake because many taxpayers assume full immediate payment is required when installment agreements may be available.

Understanding Arkansas Tax Collection Time Limits

Arkansas law provides a 10-year statute of limitations for collecting tax delinquencies from the date of assessment. A certificate of indebtedness filed with the DFA remains in force for 10 years from the date of recording and automatically expires thereafter.

Closing

Receiving an Arkansas tax enforcement notice requires prompt attention and response. Contact the Arkansas Department of Finance and Administration Collections Office at 501-682-5000 or toll-free at 800-292-9829 to discuss your options.

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.