Delaware Active Collections Timeline Checklist
Delaware state enforcement occurs when the Division of Revenue initiates collection or compliance action against a taxpayer for unpaid income tax, Corporate Income Tax, or other tax obligations. This action represents an official step by the state to resolve a tax debt or filing requirement and typically occurs after standard billing notices have been issued.
Understanding what state enforcement means helps clarify your position and available next steps. Ignoring enforcement notices can result in increased penalties, interest, liens, and other collection actions that make resolving the issue more complex and costly. This checklist outlines the process of state enforcement, the actions typically taken by the state, and the steps commonly taken in response.
What This Issue Means
State enforcement is an official collection or compliance action taken by Delaware's
Division of Revenue when a taxpayer has not resolved a tax liability or filing requirement through standard notice procedures. This action indicates that the state has moved beyond initial billing notices and is now taking active collection measures or requiring specific compliance actions.
Enforcement can include wage garnishment notices, bank levies, liens against property, or orders to file delinquent returns. State law grants the Division of Revenue specific legal authority to pursue these collection methods when taxpayers fail to respond to earlier notices.
Why the State Issued This or Requires This
The Division of Revenue typically initiates enforcement when a taxpayer has not paid a
Personal Income Tax assessment or business tax obligation within the timeframe specified in prior notices. The state may also act when a taxpayer has not filed a required return despite receiving filing notices, or when a payment plan or written contract agreement has been broken. Additionally, enforcement may begin if the state has attempted standard collection procedures without resolution.
Delaware's Division of Revenue initiates enforcement to collect taxes owed or bring accounts into compliance with state law and business compliance requirements.
Enforcement actions are standard administrative procedures designed to resolve outstanding tax obligations.
The specific enforcement method depends on the type of tax owed, the taxpayer's compliance history, and whether the obligation involves Through Entities or other business structures.
What Happens If This Is Ignored
Continuing non-response to state enforcement typically results in escalation of collection actions. The Division of Revenue may place liens on real property or personal assets, initiate wage garnishment from employers, levy bank accounts, or pursue other collection remedies available under state law.
Additional penalties and interest accrue with each passing month, increasing the total amount owed. Unlike debt collector actions for credit card debt, state tax enforcement is conducted directly by the Division of Revenue and follows specific rules and regulations established by Delaware statutes.
What This Does NOT Mean
Receiving an enforcement notice does not mean that criminal charges will automatically be filed, as criminal prosecution is a separate process from civil tax enforcement. It does not mean your assets have already been seized, since liens must be formally recorded through court proceedings and levies must be officially served.
It also does not mean all payment options have been eliminated, as payment plans and other resolutions may still be available. Finally, it does not mean you have lost the right to dispute the underlying tax debt or that you cannot seek legal counsel to review the assessment.
Delaware Active Collections Timeline Checklist
Use this checklist to organize your response after identifying or receiving a state enforcement action. This checklist reflects typical administrative procedures and does not guarantee outcomes.
Step 1: Locate and Review All Notices
Gather every notice, letter, or legal document received from Delaware's Division of
Revenue. Arrange them in date order from oldest to most recent. Read each notice to identify the type of tax (Personal Income Tax, Corporate Income Tax, gross receipts tax, or other), the tax year or period in question, the amount claimed to be owed, any deadline mentioned in the notice, and the specific enforcement action (wage garnishment, lien, levy, or filing requirement).
Make a note of any deadlines that have already passed and consider whether you need legal counsel to review complex matters.
Step 2: Verify Your Account Information
Confirm your taxpayer identification number on the notices; for individuals, this is your
Social Security number, and for businesses, this is your Federal Employer Identification
Number (FEIN), which is used for business registration. Verify that your current name,
address, and phone number are correct on the notices. If any identifying information is incorrect, note this for your records and prepare to update it with the Division of
Revenue. For out-of-state businesses operating in Delaware, ensure your registered agent information is current.
Step 3: Determine What You Owe
Identify the principal tax amount, which is the original amount assessed. Identify any penalties shown on the notice. Identify any interest charges shown on the notice. Add these together to determine the total amount claimed by the state. Note whether the state has applied any payments you may have made toward this debt, including
Estimated Payments made during tax season or payments made through the Delaware
Taxpayer Portal.
Step 4: Check for Any Agreements or Previous Communications
Search for any written contract, Installment Payment Plan, or correspondence with the
Division of Revenue about this tax debt. If a payment plan exists, determine whether you are current on payments or behind. If you have made payments, gather documentation showing when and how much was paid through direct deposit, check, payment app, or other payment methods. Save all correspondence, receipts, and payment confirmations as legal documents.
Step 5: Identify the Specific Enforcement Action
Review the most recent notice to determine which enforcement method is being used: wage garnishment (order to employer), bank levy (order to financial institution), property lien (filed against real estate or assets), administrative offset (withholding from state payments or refunds), or order to file a delinquent return. Note the specific type in your records.
Under state law, the Division of Revenue must file a Notice of Judgment in Delaware
Superior Court at least 10 days in advance of issuing a garnishment. This differs from how collection agencies typically handle consumer debt collection.
Step 6: Gather Documentation of Your Current Situation
Collect copies of recent pay stubs and W-2 forms if wage garnishment is being used.
Gather bank statements if a levy notice was received; note that banks must hold funds for 20 days after receiving a levy notice. Collect property deeds or records if a lien is being recorded.
Gather proof of any recent payments made toward this debt and records of any financial hardship or changed circumstances since the original notice. If you are a business owner, collect business license documentation and records of business regulation compliance.
Step 7: Document Any Disputes About the Tax Debt
If you believe the tax assessment is incorrect, gather documentation that supports your position. This may include copies of original federal tax returns filed, receipts or invoices supporting claimed deductions, payroll records, or income documentation such as 1099
forms, proof of payments already made, or any correspondence disputing the assessment.
For businesses, include resale certificate documentation if applicable. Note the specific reason you believe the amount is incorrect and consider whether legal counsel should review your dispute.
Step 8: Contact the Division of Revenue
Call the Delaware Division of Revenue's Collections department at (302) 577-8785 for assistance with collections and account management issues during business hours. If you need to arrange an Installment Payment Plan, call (302) 577-8586. If calling from
Kent or Sussex Counties, you may use the toll-free number 1-800-292-7826. Have all necessary notices and account information ready before making the call
Explain the situation clearly and ask whether a payment plan is available, what the deadline is for responding to the enforcement action, whether the underlying assessment can be appealed or disputed, and what options exist to halt the enforcement action temporarily.
Request the name and direct contact information for the employee or office handling your case. Take notes on what you are told, including names, dates, and next steps.
You may also access Taxpayer Services through the Delaware Taxpayer Portal for account information.
Step 9: Request Account Status in Writing
After the phone call, send a written request to the Division of Revenue asking for the current account balance and calculation, dates and amounts of any payments
previously applied, an explanation of penalties and interest applied, and a copy of the original assessment if you do not have it. Keep a copy of your written request for your records as part of your legal documents file.
Step 10: Respond to Enforcement Deadlines
If a wage garnishment or levy has been issued, the notice typically includes a deadline to respond. Under Delaware state law, wage garnishment is limited to 15% of disposable income or the amount exceeding 30 times the federal minimum wage, whichever is greater. If you need to claim hardship or dispute the enforcement action, do so by the deadline shown in the notice.
Submit any response in writing to the address shown in the notice and keep a copy of everything you submit. Unlike validation notice requirements that apply to collection agencies under the Consumer Financial Protection Bureau rules, state tax enforcement follows different procedures.
Step 11: Explore Resolution Options
Contact the Division of Revenue to explore available options, including setting up a payment plan, requesting a temporary halt to enforcement, or filing an appeal of the underlying assessment. While Delaware discontinued its formal Offer in Compromise program, you may inquire about any settlement considerations in limited circumstances—request written details about each option, including terms and deadlines.
Do not commit to any option until you have complete information. Consider consulting legal counsel if the matter is complex or involves significant amounts.
Step 12: Organize Your Complete File
Create a folder (physical or digital) containing all notices received from the state in date order, notes from phone calls (dates, names, what was discussed), copies of all written correspondence sent to the state, payment documentation and receipts, documentation of income including W-2 forms and 1099 forms, other relevant financial records, and any written contract agreements or payment plans.
Keep this file secure and accessible. Include copies of federal tax returns filed using
IRS Free File or through tax preparation services.
Step 13: Follow Up on Your Request
If you submitted a written request or dispute, contact the Division of Revenue after five to ten business days to confirm receipt. Ask about the timeline for a response. Request the name and direct contact information of the person handling your request. Document all follow-up communications in your records.
- Ignoring notices or deadlines: Continuing to ignore enforcement notices
- Failing to respond to wage garnishment or levy notices: These notices
- Paying the wrong amount: Ensure that any payment clearly identifies your
- Not keeping copies of communications: Maintain copies of all notices, letters,
- Assuming the assessment is final, appeal options may still be available, even
- Not asking about available options: The Division of Revenue may have
- Providing incomplete information: If you submit documentation or
- Missing payment plan payments: If an Installment Payment Plan is
- 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
Step 14: Monitor Your Account
If a payment plan is established, track payments to ensure they are posted correctly to your account through the Delaware Taxpayer Portal or by contacting the Division. If wages are being garnished or a levy is in place, ask when these actions will stop.
Request a written confirmation once the enforcement action has been resolved or halted. Maintain compliance with all business compliance and business regulation requirements to avoid future enforcement actions.
What Happens After This Is Completed
After you respond to state enforcement or establish a resolution plan, the Division of
Revenue typically processes your response and takes corresponding action. If a payment plan is approved, the state normally halts additional collection efforts while you make agreed-upon payments.
If the debt is paid in full through direct deposit or other payment methods, the state typically removes any liens or levies and confirms closure of the enforcement action in writing. Processing timelines vary depending on the complexity of your situation and the current workload of the Division of Revenue.
Common Mistakes to Avoid typically results in escalation of collection actions and additional penalties and interest. Unlike collection agencies handling consumer debt, the Division of
Revenue handles state tax collection directly and has broader legal authority. typically include a deadline for response. Missing the deadline can limit your options for stopping or modifying the action under state law. taxpayer identification number and the tax year or period being paid. Payments without proper identification may be misapplied, whether made through direct deposit, payment app, or check. payment receipts, and correspondence with the Division of Revenue as legal documents proving your compliance efforts. after enforcement begins, depending on the type of tax and the timing. The
Statute of Limitations for collection in Delaware is 10 years from the date an assessment becomes final. payment plans or other resolutions available. Asking is typically the first step toward resolution, much like the Internal Revenue Service handles federal tax matters. explanations to the Division of Revenue, ensure they are complete and clearly labeled with your identification information, including all relevant W-2 forms and
1099 forms. established, making payments on time is essential to maintaining the agreement and preventing additional enforcement action.
Frequently Asked Questions
Can the state take enforcement action without first sending me a notice?
Delaware typically issues multiple billing notices before initiating formal enforcement action; however, if the Division concludes that collection is threatened or in jeopardy, immediate collection action may be taken before all standard requirements have been met.
Does state enforcement mean I owe criminal taxes?
No. State enforcement is a civil collection procedure. Criminal tax prosecution is a separate process under state law and is not automatically triggered by enforcement action.
Can a wage garnishment start immediately?
No. Under Delaware state law, the Division of Revenue must file a Notice of Judgment in Delaware Superior Court at least 10 days in advance of issuing a garnishment. The garnishment does not begin immediately upon notice.
If I set up a payment plan, will the state stop the enforcement action against me?
Typically, yes. When an Installment Payment Plan is approved, and you are making payments according to the written contract terms, additional collection actions are generally halted. However, this depends on your compliance with the plan.
How much of my wages can the state garnish?
Delaware state law limits wage garnishment to 15% of disposable income or the amount exceeding 30 times the federal minimum wage, whichever is greater. This is more restrictive than federal limits and different from court judgments involving other types of debt.
Facing State Tax Enforcement Action?
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