Arkansas Bank Levy Checklist

taxpayer owes unpaid taxes or has failed to meet state filing requirements. The DFA initiates formal collection procedures after standard notices fail to resolve outstanding balances for state income tax, sales tax, or other state-administered tax liabilities.

Enforcement actions include bank account levies, wage garnishment, and property liens. These measures represent the state’s legal obligation to collect revenue owed under Arkansas tax law.

Why the Arkansas DFA Issues Enforcement Actions

The state issues enforcement notices when you owe taxes and have not responded to previous communications. Common triggers include unfiled returns, unpaid tax bills, missed installment payments, or failure to respond to collection letters from the Arkansas Department of Finance and Administration Revenue Division.

Consequences of Ignoring Enforcement Notices

Ignoring Arkansas DFA tax enforcement typically results in progressive collection actions. The state may pursue a bank levy that freezes or withdraws funds from your account, wage garnishment that diverts a portion of your paycheck directly to the state, or file a lien on your property that affects your ability to sell or refinance real estate.

Critical Actions After Receiving an Enforcement Notice

Gather Documentation

Locate all letters and notices from the Arkansas DFA related to your tax debt. Organize documents chronologically and note the tax years involved, the type of tax owed, and the stated balance.

Understand Your Timeline

After receiving a Final Assessment and Demand for Payment, you have 70 days to respond, pay, appeal, or establish payment arrangements before the DFA proceeds with wage garnishment or bank levy. Protesting a Notice of Proposed Assessment directly with the DFA requires action within 60 days of the notice date.

Appeals of a final assessment to the Arkansas Tax Appeals Commission must be filed within 90 days from the date of the final evaluation. These deadlines cannot be extended, and the appeal venue changes depending on which stage your case has reached.

Contact the Collections Office

Reach out to the Arkansas Department of Finance and Administration Collections Office at

501-682-5000 or toll-free at 800-292-9829. Explain your situation clearly and ask whether payment plans, temporary collection pauses, or hardship considerations are available.

Address Unfiled Returns

Determine which tax years remain unfiled if applicable. Gather all income documents, including

W-2s, 1099s, and K-1s for those years, then complete and submit unfiled returns to the DFA with proof of submission.

Appeal Rights and Procedures

Taxpayers have the right to dispute tax assessments they believe are incorrect. As an independent body under the Department of Inspector General created in 2022, the Arkansas

Tax Appeals Commission hears appeals of final assessments.

Petitions must be filed within 90 days of the final assessment date. Submission of copies of relevant DFA notices and supporting documents is required, as the Commission does not have access to DFA records.

Petitions can be filed electronically through the Commission's online form or by mailing paper forms to the Commission office. The DFA must file an answer to your petition within 60 days, and hearings are scheduled within 90 days of the reply in non-expedited cases."

Payment Plans and Financial Hardship Options

Payment plans offered by the Arkansas DFA allow you to pay tax liabilities over time. Contact the Collections Office to inquire about qualification requirements, terms, monthly payment amounts, and plan duration.

Ask whether establishing a payment plan will pause current enforcement actions. Even when a payment plan is in place, the state may file a Certificate of Indebtedness as required by law.

If you cannot pay anything currently due to financial hardship, explain your circumstances to the

DFA. An Offer in Compromise program exists for financially distressed taxpayers who qualify.

This program allows eligible taxpayers to resolve overwhelming tax liabilities by paying a reduced amount. Insolvency under Arkansas law means your expenses exceed your income or your liabilities exceed your assets.

Collection Statute of Limitations

Arkansas has a six-year statute of limitations for collections. The state may collect tax debt for up to 6 years from the date of assessment, unless the statute is extended by specific actions, such as entering into payment agreements or filing for bankruptcy.

State Tax Refund Offset Program

The state automatically offsets state income tax refunds against unpaid state tax debt. This is a mandatory procedure under Arkansas law, not a discretionary practice.

What Enforcement Does Not Mean

Arkansas DFA tax enforcement does not constitute criminal prosecution or potential jail time for owing taxes. The state pursues collection through administrative and civil actions, and criminal prosecution for tax evasion is rare and involves intentional fraud rather than inability to pay.

Common Mistakes to Avoid

Missing communication deadlines delays resolution and may result in continued enforcement.

Each notice may contain new information or different deadlines requiring careful review. Making

partial payments without contacting the DFA first may not stop enforcement unless a formal payment plan is in place. Providing incomplete documentation when the DFA requests information may require resubmission.

Changing contact information without notifying the DFA results in undelivered notices and missed deadlines. Payment plans, hardship considerations, and dispute processes remain available even during active enforcement.

Conclusion

State tax enforcement follows established procedures with defined timelines and taxpayer rights at each stage. Understanding these procedures allows you to address enforcement directly and explore available resolution 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.

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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