Colorado Final Notice of Intent to Levy or Enforce Checklist
A Final Notice of Intent to Levy from the Colorado Department of Revenue is a serious notice that tells you the state is about to take collection action to collect unpaid tax debt, penalties, or fees directly from your income, bank accounts, or other assets. This notice comes only after earlier payment requests and warnings, so it matters because the state has moved beyond asking for payment and is now preparing to enforce collections. Ignoring this notice will not make it go away, and the longer you wait to respond, the harder it becomes to stop or manage what comes next.
What This Notice Means
A Final Notice of Intent to Levy means the Colorado Department of Revenue has decided to collect what you owe by taking money directly from you, either from your wages through wage garnishment, your bank accounts through a bank levy, or other sources the state can access. This is not a threat or a warning letter; it is an official notice that the state plans to carry out a levy (a legal seizure of money or property) unless you respond by the deadline printed on the notice. This notice represents the stage immediately preceding the initiation of actual collection action.
Why the State Sent This Notice
Colorado sends a Final Notice of Intent to Levy when a delinquent taxpayer has not paid taxes, penalties, or fees after receiving earlier notices and payment deadlines have passed. The state typically issues several payment reminders before reaching this stage. The specific trigger could be an unpaid income tax bill, unpaid sales tax, unpaid penalty and interest assessments, or other tax-related debts.
Internal state processes indicate that this notice is issued only after the state's earlier collection attempts have failed to result in payment, and it may relate to delinquent returns or unfiled tax returns that have since been filed but remain unpaid.
What Happens If You Ignore This Notice
If you do not respond by the deadline on the notice, the Colorado Department of Revenue will issue levies against your assets. Once a notice of levy is issued to your employer or bank, it cannot be paused, reversed, or otherwise held for any reason. This typically means the state will start deducting money from your paycheck through continuous wage levy, freezing your bank account through a bank levy, or placing a tax lien on your property through a separate judgment process.
The exact timing and method depend on your situation and which collection tool the state chooses to use first. Once a levy starts, it continues until the debt is fully paid or you contact the state to arrange a different payment plan.
What This Notice Does Not Mean
This notice does not mean you are facing criminal charges or that a court has ordered you to pay. This is a state tax collection notice, not a court judgment. The notice also does not mean the state has already seized your money or taken action; it serves as a warning that these actions may be taken if you do not respond.
You still have time to contact the state and explain your situation or make arrangements before the actual levy occurs. This notice is separate from any Internal Revenue Service action and applies only to state tax obligations.
Important Distinction About Hearing Rights
The right to request an administrative hearing applies to a Notice of Deficiency or Rejection of Refund Claim, not to a Final Notice of Intent to Levy. These are two different notices in the collection process. A Notice of Deficiency allows you 30 days to challenge the amount you owe through a formal protest or hearing.
However, a Final Notice of Intent to Levy comes later in the process after earlier notices were ignored. At this stage, your options are limited: you must pay the balance in full or initiate an authorized payment plan by the deadline stated in the letter to stop the levy.
Understanding the Collection Statute and Time Limitations
The state operates under a collection statute that sets the time period during which it can collect unpaid taxes. While this statutory collection period is typically several years, it does not prevent the state from taking immediate levy action once a Final Notice of Intent to Levy has been issued. The collection determination has already been made, and collection employees are authorized to proceed with enforced collections unless you take action by the deadline.
Understanding these time limitations helps you recognize the importance of responding to this notice promptly.
Checklist: What to Do After Receiving This Notice
Step 1: Read the Notice Completely and Locate Key Information
Open the notice and read it from beginning to end, even if it is long or contains unfamiliar terms. Write down or highlight the amount of money owed, the tax year or tax period the debt relates to, the deadline date for you to take action to prevent levy issuance, the specific type of tax owed, and the Colorado Department of Revenue office or phone number listed on the notice for contact information.
Also, note any case number, notice number, or account number that belongs to your account. Understanding the levy details in your specific notice is crucial for responding appropriately.
Step 2: Verify You Actually Owe This Debt
Verify your own records to ensure the amount and tax year are accurate. Look for old tax returns you filed for the year mentioned on the notice, any payment receipts or bank records showing you already paid this debt, records of any payment plans or agreements you made with the state, and notices from the state about this debt that arrived before this final notice. If you believe you do not owe this debt, or if you think you already paid it, write down the reason now because you will need to explain this when you contact the state.
Issues such as levy errors can sometimes occur if payments were not properly credited to your account.
Step 3: Gather All Related Documents
Collect anything that relates to this tax debt: all previous notices from the Colorado Department of Revenue about this debt (these may have arrived months or years ago), copies of the tax return you filed that relates to this debt, bank statements or payment confirmations showing any levy payments you made toward this debt, correspondence with the state about this debt, and documentation of your current financial situation. If you own a business, gather business records and accounting documents.
Keep these documents in one folder or an organized file because you may need to show them to the state or a tax levy attorney if you need professional assistance.
Step 4: Understand Your Response Options for Tax Resolution
After receiving this notice, you have limited but essential options for tax resolution: pay the balance in full by the deadline stated in the letter, or propose an installment agreement to pay the debt over time instead of in one lump sum. You may also explain the circumstances that make it difficult for you to pay right now. The notice should explain how to request each of these options, so read that section carefully.
If you need additional time to arrange payment, contact the state immediately to discuss your situation.
Step 5: Contact the Colorado Department of Revenue Immediately
Please call the phone number listed on the notice as soon as possible. Have your notice, documents, and account information ready. When you call, explain that you have received the Final Notice of Intent to Levy, whether you believe you owe the debt or think it has already been paid, and what you would like to happen next (payment in full, an installment agreement, or another option). Be honest about your financial situation, as the state may be more willing to work with you if you communicate clearly and promptly.
Collection employees are authorized to discuss your options and prevent unnecessary levy action if you respond promptly.
Step 6: Put Your Response in Writing
Even if you speak to someone by phone, send a written response by mail. Include your name and address, your account or case number from the notice, a clear statement of what you are requesting, a brief explanation of your situation or why you are requesting what you asked for, copies of any documents that support your position (not originals), and the date you are sending the letter.
Send this letter to the address on the notice via trackable mail (such as certified mail) so you have proof of receipt.
Written documentation protects you if separate collection issues arise later.
Step 7: Keep Detailed Records of All Communication
Every time you contact the state or send paperwork, write down the date, time, and name of the person you spoke with. Note what you discussed or what you sent. Keep copies of every letter, email, or document you send. Save records of phone calls (dates, times, names of collection employees you spoke with).
Keep the notice itself and all related letters from the state. Create a timeline showing when you received the notice and what you have done since then. This documentation is essential if wrongful levy situations occur or if you need to request a partial or complete release of the levy in the future.
Step 8: Explore Whether an Installment Agreement is Possible
If you owe the debt and cannot pay it in full right now, the state may allow you to pay it over time through an installment agreement. When you contact the state, ask whether an installment agreement is available for your situation, what the monthly payment would be, how long the payment plan would last, and whether penalties and interest continue to accrue. At the same time, you are on the plan, and what happens if you miss a payment?
An installment agreement may prevent the levy if you arrange it before the deadline stated in the notice. This is often the most practical tax resolution option for delinquent taxpayers who are unable to pay immediately.
Step 9: Understand That Only Specific Actions Will Stop the Levy
Responding to the notice by the deadline is essential. Still, only two actions will prevent levy action: paying the balance in full by the deadline stated in the letter, or initiating an authorized installment agreement by that same deadline. Simply calling or writing to the state without taking one of these two actions will not prevent the levy from being issued once the notice has been sent.
The notice of levy attaches to your assets once it is delivered to your employer or bank, and the levy cannot be paused or reversed after issuance except through full payment or formal release of the levy procedures.
Step 10: Understand Levy Types and Their Impact on Your Assets
The Colorado Department of Revenue can issue different levy types depending on your situation. A continuous wage levy on your paycheck continues until the debt is paid in full, typically taking 25 percent of your disposable income. A bank levy is a one-time seizure that freezes and removes funds from your bank accounts up to the amount owed.
Understanding which levy type may be issued helps you prepare an appropriate response. Both levy types have serious financial consequences and should be avoided by responding before the deadline to prevent a levy on property or a levy on assets.
Step 11: Consider Special Circumstances That May Affect Collection
If you are a taxpayer in bankruptcy, different rules may apply to collection action, and the state must honor the automatic stay. Contact the state immediately to inform them of your bankruptcy status, as the automatic stay in bankruptcy may prevent levy action. If you believe you are subject to wrongful levy situations or if levy proceeds were taken in error, you may request return of property or return of money through formal procedures.
Exceptional circumstances such as these require immediate communication with the state and possibly consultation with a tax levy attorney for guidance.
Step 12: Mark Your Calendar for All Deadlines
The notice contains the critical deadline by which you must pay in full or initiate an installment agreement to avoid levy action. Write this date on your calendar now and set reminders to help you stay on track leading up to it. Do not miss this deadline, as missing it will result in the levy proceeding automatically.
The time period stated on your notice is firm and cannot be extended, except in rare circumstances. Therefore, treat this deadline as absolute and contact the state well before the deadline expires.
Common Mistakes to Avoid
● Do not miss the deadline on the notice to pay in full or arrange an installment agreement. Missing this deadline almost certainly results in a levy that cannot be stopped.
● Do not assume the tax debt will go away if you ignore the notice. The longer you wait, the more likely a levy will begin and the harder it becomes to stop.
● Do not send cash or money orders through the mail without tracking the payment; always use payment methods the state accepts and that provide a receipt or confirmation.
● Do not throw away any previous notices or correspondence from the state, even old notices, because these documents may be vital if you need to prove you already paid or address a calculation error.
● Do not assume the matter is resolved solely by phone; always send a written response to ensure a record and to provide the state with documentation of your request.
Frequently Asked Questions
How much time do I have after receiving this notice?
The deadline is printed on the notice itself. You must pay the balance in full or initiate an authorized installment agreement by the date stated in the letter. Please refer to your specific notice for the exact date. This time period is firm, and levy action will proceed automatically if you miss it.
Can the state withdraw money from my bank account without additional notice?
Yes. After the deadline specified in this notice passes, the state may issue a notice of levy to your bank, instructing it to freeze and seize funds from your bank accounts if you have not paid in full or arranged an installment agreement. This is why the response deadline is so important.
What if I disagree with the amount owed?
If you received a Notice of Deficiency earlier in the collection process, you had 30 days from that notice to request an administrative hearing to challenge the amount. A Final Notice of Intent to Levy is issued later, after earlier notices were ignored. At this stage, contact the state immediately to explain why you believe the amount is wrong and provide documentation. Collection employees can review your account and make adjustments if appropriate.
Will an installment agreement stop the levy?
Yes, if you arrange an authorized installment agreement before the deadline stated in the notice. Contact the state immediately if an installment deal is your best option for resolving your tax issues.
What if I am unable to pay at all right now?
Contact the state immediately and explain your situation. The state may delay the levy, place you on an installment agreement with minimal payments, or discuss other options such as a hardship accommodation. Not contacting the state makes things worse and guarantees levy action will proceed.
Is this notice the same as a court order?
No. This is a state tax collection notice, not a court order. The state can issue this notice without the need for a court hearing. However, if you do not respond, the state will take collection action through wage garnishment or bank levy.
What is the difference between a levy and a tax lien?
A levy is the actual seizure of assets, such as wages or bank accounts, to satisfy a tax debt. A tax lien is a legal claim against a taxpayer's property that secures the state's interest in collecting the debt, but does not immediately seize assets. The state sends a separate Notice of Intent to Issue Judgment or tax lien for lien actions.
What if the levy was issued in error?
If you believe a levy in error occurred or you are subject to wrongful levy situations, contact the Colorado Department of Revenue immediately with documentation showing why the levy should not have been issued. The state has procedures to review levy-in-error claims and may issue a release of levy if the claim is valid. You may also request the return of money if levy proceeds were already taken and the levy is determined to be erroneous.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance
