Arkansas State Tax Lien Checklist

Arkansas State Tax Lien Checklist

What State Enforcement Means

State enforcement action occurs when the Arkansas Department of Finance and Administration takes formal steps to collect unpaid state tax liability. Officials typically move to enforcement after payment deadlines have passed and previous collection notices have not resulted in payment or response.

Enforcement can include tax liens, wage garnishments, bank levies, or other collection methods authorized under Arkansas Tax Law. Your specific enforcement method depends on the type of tax owed, the amount due, and your account history with the department.

Why the Arkansas Department of Finance and

Administration Issues Enforcement

The Arkansas Department of Finance and Administration typically moves to enforcement when standard collection efforts have not produced results. Common triggers include repeated failure to respond to tax notices, failure to pay state tax by the deadline, failure to file a required tax return, or failure to honor an installment agreement.

What Happens If Enforcement Is Ignored

Ignoring an enforcement action typically results in the taxing authority escalating collection efforts. If the department has filed an Arkansas state tax lien, it becomes part of your property record and may prevent you from selling or refinancing property.

Wage garnishment will cause your employer to begin withholding money from your paychecks under federal Consumer Credit Protection Act limits. Bank levies will freeze or drain funds from the account to satisfy the debt.

Additional enforcement measures, penalties, and interest charges may be imposed if the debt remains unpaid. Accumulating interest and penalties cause your total tax debt to grow larger the longer enforcement continues.

What Enforcement Does Not Mean

Receiving an enforcement notice does not mean you have lost all options to address the debt. It does not automatically mean property will be seized or sold through foreclosure proceedings.

The department has not yet taken all possible collection actions unless multiple enforcement methods are already in place. You retain the right to request payment plans, discuss your situation with the department, or explore an offer in compromise if you qualify.

Steps to Take After Receiving an Enforcement Notice

1. Locate the original enforcement notice or letter from the Arkansas Department of

Finance and Administration and read the entire document carefully. Identify the tax year, the amount owed, and the specific enforcement action being taken on your account.

2. Review your personal tax records for the tax year listed on the notice to verify the debt amount is correct. Gather supporting documents such as previous tax returns, payment receipts, and correspondence to compare against the notice details.

3. Call the phone number listed on the enforcement notice, which is typically 501-682-5000 for the Arkansas Department of Finance and Administration. Provide your name, Social

Security number, and the notice reference number to access your account information.

Ask for clarification on the debt amount, the tax year, and the enforcement action being taken, and inquire whether payment arrangement options are available.

4. Review your bank accounts, income, and monthly expenses to determine your current ability to pay the full amount owed. Decide whether you can pay a portion of the debt now or need to request an installment agreement from the department.

5. Contact the department and ask whether an installment agreement is available for your case. Be prepared to discuss your income and monthly expenses, as the department may require you to complete a financial statement showing your ability to pay.

6. Consider making a payment toward the debt to demonstrate good faith and reduce the balance if you have funds available. Keep receipts and payment confirmation for your records, and note the payment method accepted by the department, such as online payments, checks, or other approved methods.

7. Keep a log of all phone calls, emails, and letters to the Arkansas Department of Finance and Administration. Record the date, time, person's name, and main points discussed during each contact.

What Happens After You Complete These Steps

After you have taken these steps, the Arkansas Department of Finance and Administration will typically process your information and respond to your request within a reasonable timeframe.

Payment submissions will be applied to your account and reduce your balance accordingly.

Requesting an installment agreement will prompt the department to provide written terms and instructions for making monthly payments. Interest continues to accrue during payment plans at a rate of ten percent annually, as the department does not stop charging interest on outstanding tax liabilities even when an installment agreement is in place.

Common Questions About Arkansas State Tax Liens

Does an Arkansas state tax lien mean the department will take my house?

An Arkansas state tax lien gives the department a legal claim against your property recorded with the circuit clerk. It does not automatically mean the department will seize or sell your house through foreclosure.

Can the department garnish my wages?

Yes, wage garnishment is a standard enforcement method used by the department. Federal law limits garnishment to the lesser of twenty-five percent of your disposable earnings or the amount by which your weekly disposable earnings exceed thirty times the federal minimum wage.

How long can the department collect my tax debt?

Arkansas Code section 26-18-306 states the department may collect tax by levy or court proceeding if the action is begun within ten years after the date of the assessment. Some sources cite a six-year collection period, creating confusion that requires clarification directly from the Arkansas Department of Finance and Administration.

Will the lien be removed if I set up an installment agreement?

An Arkansas state tax lien may remain on your record even if you agree to an installment agreement. The lien is typically removed after the debt is fully paid, and you request a release from the department.

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.