Illinois State Tax Enforcement Decision Checklist
Introduction
Collection action is the formal process Illinois uses to collect unpaid taxes, penalties, and interest when a taxpayer has not paid voluntarily or responded to earlier notices. It represents an escalation from standard collection activities and typically occurs after initial attempts to resolve the debt have not succeeded.
Understanding what a collection action means, how it works, and the steps that follow helps reduce confusion and prevent further complications. Collection actions can affect your professional licenses, business certificates, bank accounts, wages, and other assets, making it critical to recognize these notices and respond appropriately.
This checklist explains the collection process, what it means for you, what happens if ignored, and the steps you can take once you receive notice or identify a collection issue.
What Collection Actions Mean
Collection actions occur when the Illinois Department of Revenue moves from standard collection notices to more aggressive collection measures. A collection notice typically indicates that the state considers your tax debt serious enough to pursue collection remedies available under Illinois law.
This can include wage garnishment, bank account levy, property liens, professional or business license holds, or other collection tools. Collection actions represent a distinct stage in the collection process—they are not the same as owing taxes, and they are not court judgments.
Rather, they represent the state’s administrative authority to enforce tax collection through specific legal mechanisms.
Why the Department Initiates Collection Actions
Illinois initiates collection actions when certain conditions are met. According to state guidance, the most common triggers include a tax debt that remains unpaid beyond specified timeframes, failure to respond to prior collection notices, or failure to comply with a payment agreement. The state may also pursue collection actions if a tax return shows a balance due and payment has not been received.
The specific rules and procedures for when collection actions begin are established under
Illinois tax law. Collection actions are tools designed to encourage payment and ensure compliance with tax obligations.
Consequences of Ignoring Collection Notices
If a collection notice is ignored or no response is made, the state typically pursues the collection action specified in the notice. Bank accounts or wages may be levied or garnished. The department may notify licensing authorities to begin proceedings regarding professional or business licenses.
Property may be seized or subject to liens. In most cases, the collection action itself is not instantaneous—there are usually opportunities to address the debt before it occurs. Continuing to ignore notices or failing to respond to collection actions can result in escalation of collection efforts and additional penalties.
What Collection Actions Do Not Mean
Receiving a collection notice does not mean you have lost all rights or options. It does not automatically mean your bank account will be frozen without further notice or that wage garnishment will begin immediately. It does not mean criminal prosecution is underway or that you are being prosecuted in court.
A collection notice is an administrative collection action, not a criminal matter or a judgment. It also does not mean payment arrangements are no longer available or that the state will not negotiate with you. Many collection situations can still be resolved through communication with the Department of Revenue.
Steps to Take After Receiving Collection Notices
Step 1: Locate and Review the Collection Notice
Find the official notice from the Illinois Department of Revenue. Read the entire notice carefully, including all deadlines and instructions. Note the specific collection action being threatened, such as wage levy, bank account levy, property lien, or professional license hold. Record the notice date, case number, or reference number, and any contact information provided.
Step 2: Verify the Tax Debt Information
Confirm the tax year or years and amount listed on the notice. Check your tax records to determine whether you filed a return for that year. Review any prior notices or correspondence you received about this debt. Determine whether you have already made payments on this debt.
Step 3: Determine Whether You Dispute the Debt
Decide whether you believe the debt is accurate or whether you have a reason to dispute it.
Note any circumstances that apply, such as a return filed but not received, a payment sent but not credited, identity theft, or incorrect calculation. Do not assume the state’s records are wrong, but document your reasoning if you believe there is an error.
Step 4: Contact the Illinois Department of Revenue
Call the Department of Revenue using the phone number on your notice or the official website.
Identify yourself and provide your case or reference number. Ask to speak with a representative about your collection notice. Be prepared to discuss the debt, your ability to pay, and any disputes you have.
Step 5: Ask About Available Options
During your conversation, ask about the options available to address the collection notice.
Options may include payment in full, installment agreement, hardship consideration, or dispute procedures. Ask what deadline applies to your response and what happens if you do not respond by that date. Ask whether you can request a hearing or appeal the collection action.
Request the name of the representative you spoke with and any reference numbers.
Step 6: Document Your Communication
Write down the date, time, and name of the person you spoke with. Note what was discussed and what you were told about the next steps. Keep a record of any promises, agreements, or action items. Save all emails or written correspondence from the Department of Revenue.
Step 7: If You Can Pay the Full Debt, Obtain Payment Instructions
Ask how to pay the full amount owed. The notice may specify payment methods. Ask whether payment should include penalties and interest or the principal tax debt only. Ask for confirmation that payment will stop the collection action. Make payment using the method specified by the state.
Step 8: If You Cannot Pay in Full, Propose a Payment Plan
Explain your financial situation to the Department of Revenue representative. Ask about installment agreement options, payment plan terms, and what amount you can pay monthly. Ask how long a payment plan can extend and whether the collection action will be paused during the plan. Request the terms in writing before committing.
Step 9: If You Dispute the Debt, Request a Hearing or Review
Explain why you believe the debt is incorrect or should not be enforced. Ask whether you can request a formal hearing, administrative review, or appeal of the collection action. Ask what evidence or documentation you should provide to support your dispute. Ask for information about the appeal or hearing process and any deadlines that apply.
Step 10: If You Claim Hardship, Request Hardship Consideration
If you are experiencing financial hardship, ask whether the Department of Revenue considers hardship requests. Explain your situation, such as unemployment, medical crisis, or disability.
Ask what documentation is needed to support a hardship request. Note that hardship does not eliminate the debt but may affect collection priorities.
Step 11: Respond to the Notice Within the Deadline
If the notice specifies a deadline for a response, meet it. Respond in writing, by phone, or by the method the notice indicates. Keep proof that you responded, such as a certified mail receipt or email confirmation. Do not miss the deadline, as missing it may result in immediate collection action.
- Ignoring the collection notice entirely does not make it disappear, and it typically triggers
- Missing response deadlines can result in immediate levies, garnishments, or other
- Not reading the entire notice carefully may mean you miss important instructions on how
- Sending payment to the wrong address or by the wrong method may result in the
- Assuming you have more time than you do is a mistake. Respond as soon as possible.
- Not keeping records of your communications leaves you without proof of what was
- Failing to follow through on a payment plan can restart collection proceedings. Not
- 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 12: Follow Up if You Do Not Receive a Response
Follow up if the Department of Revenue does not respond within the specified timeframe. Call again using the phone number on your notice or the official website. Provide your case number and reference information from your earlier contact. Ask for status and confirm next steps.
What Happens After You Respond
After you respond to the collection notice or take action on the debt, the Department of Revenue typically reviews your situation. If you pay in full, the state usually cancels the collection action and closes the case. The state usually stops collection efforts and keeps an eye on your payments if you set up a payment plan.
Failure to make agreed-upon payments may restart collection proceedings. If you request a hearing or appeal, the state schedules a review or hearing and notifies you of the date and process.
If you claim hardship or dispute the debt, the state evaluates your submission and determines the next course of action. In all cases, processing can take several weeks, and you may receive follow-up notices during this time.
Errors to Avoid the collection action. collection actions without further notice. to respond, what options are available, and what will happen next. payment not being applied to your debt. discussed or agreed upon. asking questions if you do not understand the notice may lead you to take the wrong course of action.
Frequently Asked Questions
What is the difference between a collection notice and an earlier billing notice?
An earlier billing notice is a payment request. A collection notice indicates that the state is pursuing or will pursue specific collection tools, such as levies or garnishments, to collect the debt. Collection notices represent a more serious stage in the collection process.
Can I appeal a collection notice?
State guidance allows for the appeal or review of specific collection actions and decisions through an administrative process. Contact the Department of Revenue to ask whether your specific situation qualifies for appeal or hearing rights.
If I set up a payment plan, will the collection action stop?
In most cases, yes. If you arrange a payment plan and make agreed-upon payments, the state typically pauses collection activities. Missing a payment on the agreed plan may result in the resumption of collection actions. Confirm the terms in writing before committing to the plan.
What if I cannot afford to pay, even with a payment plan?
Contact the Department of Revenue and explain your situation. Ask about hardship options, ask whether collection activities can be postponed, or ask whether other arrangements exist. In some cases, the state considers financial hardship, though it does not eliminate the debt.
If I dispute the debt, can I stop the collection action while the dispute is being reviewed?
This depends on the specific circumstances. Contact the Department of Revenue, explain your dispute, and ask whether collection activities can be paused pending review of your claim. The answer varies based on the nature of the dispute and state procedures.
What if I think the debt is due to identity theft or fraud?
Contact the Department of Revenue immediately and explain the situation. Provide any documentation you have. Ask about identity theft procedures and the steps you can take to verify that the debt is not yours.
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:
20+ years experience • Same-day reviews available
