Mississippi Sales Tax Enforcement Actions Checklist

• A business has not filed required sales and use tax returns for one or more periods.
• A return shows incomplete or incorrect tax liability that requires correction or verification.
• Sales tax was collected from customers but not remitted to the state treasury.
• A business registration exists, but no returns have been filed for active periods.
• The state discovers unreported sales activity or Mississippi use tax obligations through

third-party reports, prior audits, licensing inquiries, or routine compliance reviews.

What Happens If This Is Ignored

Missing the Mississippi Review Board's 60-day deadline to appeal a Notice of Assessment makes the assessment final and not subject to further review. After sixty days without payment or appeal, the Department proceeds to collect the tax as determined by the assessment.

The state assesses additional penalties and interest on unpaid taxes according to statutory requirements. Continued non-compliance leads to follow-up notices, formal assessment letters, or liens placed against business tax accounts or personal property.

Unresolved enforcement actions remain on record for years and complicate future tax filings or business transactions. Enforcement actions may also prevent business license renewal or create barriers to obtaining state permits or registrations.

What This Does NOT Mean

An enforcement action does not automatically mean the state has made a final determination of how much tax is owed. The taxpayer has opportunities to respond, provide documentation, or contest the finding through the Mississippi Department of Revenue appeal process.

Receiving a notice is not the same as a levy or lien being placed because those are later actions that occur only if earlier notices are not resolved. Sales and use tax enforcement in

Mississippi is primarily administrative and civil in nature.

Routine enforcement actions do not involve criminal charges, although certain violations, such as operating without a license or willful tax evasion, can result in criminal referral to the Criminal

Investigation Division.

Checklist: What to Do After Receiving This or Identifying

This Issue

1. Read the entire notice carefully and identify the reason for the enforcement action, the tax period involved, and the date the notice was issued.

2. Locate the deadline or response date specified in the notice and write down the exact date by which the state expects a response or payment.

3. Gather all business records related to the tax period in question, including sales records, bank statements, accounting ledgers, prior tax returns, and correspondence with the

Department of Revenue.

4. Determine whether the business has filed sales tax returns for the period mentioned in the notice by checking state records, accounting files, or prior correspondence.

5. Review the notice for a specific dollar amount or assessment, note the amount if stated, and verify the calculation against business records, including any use tax components.

6. Identify the contact information provided in the notice, which may include a phone number, mailing address, email address, or case number.

7. Consult with an accountant or tax professional if documentation is unclear or if the business has no records for the period in question, particularly for Mississippi use tax calculations.

8. Prepare a written response if the notice asks for information, including only factual information and requested documentation, and send copies only along with a completed power of attorney form if representation is needed.

9. Submit the response or payment by the deadline stated in the notice, keeping a copy of everything sent and a record of the submission method and date.

10. File all notices and correspondence in a safe location with dates clearly marked and monitor for follow-up notices or requests for additional information.

What Happens After This Is Completed

After a response or payment is submitted, the Mississippi Department of Revenue reviews the information and either confirms compliance, requests additional documentation, or issues a final assessment. Processing times vary, and the state sends written confirmation when the payment is received and applied.

If an assessment is finalized, the taxpayer receives a formal Notice of Assessment with details about the amount owed, the calculation method, and any applicable penalties and interest.

Interest continues to accumulate on unpaid taxes during an enforcement action at 0.5 percent per month until the tax is paid.

Common Mistakes to Avoid

Missing the response deadline is the most common error because missing deadlines results in automatic assessments or escalated collection actions. Sending incomplete information or documentation may result in follow-up notices or default assessments.

Not keeping copies of everything sent to the state eliminates the record of compliance. Sending original documents instead of copies may result in lost or damaged materials. Not verifying the payment receipt means the taxpayer cannot confirm that the state received and processed the payment. Failing to respond because the notice is confusing creates additional problems when contacting the Department of Revenue for clarification would resolve the confusion.

Frequently Asked Questions

What is the difference between an enforcement action and an audit?

An audit is a detailed examination of business records over a specific period. An enforcement action is a broader term that includes audits, assessments based on missing records, collection notices, and other compliance measures for sales and use tax obligations.

Does receiving an enforcement notice mean I will be penalized?

An enforcement notice does not automatically result in penalties. Mississippi law imposes a ten percent penalty for negligence or failure to comply without intent to defraud and a fifty percent penalty for intentional disregard or fraud.

What if I cannot locate records for the tax period in question?

Contact the Department of Revenue and explain the situation in writing while providing whatever documentation is available. Mississippi has a thirty-six-month statute of limitations for determining and assessing taxes on filed returns, but there is no statute of limitations for periods when no return was filed.

Can I dispute an amount assessed in an enforcement action?

You have sixty days from the date of the Notice of Assessment to file an administrative appeal to the Review Board. If the Review Board affirms the assessment, you have sixty days from the date the Review Board mailed its order to appeal to the Board of Tax Appeals at Woolfolk State

Building, 501 N. West Street, Suite 118B, Jackson, MS 39201.

The Board of Tax Appeals is an independent quasi-judicial agency that hears appeals from

Review Board decisions. Following a hearing, if the taxpayer disagrees with the decision, a further appeal may be filed with the chancery court.

Interest will continue to accrue at 0.5 percent per month on any applicable use tax obligations during the administrative appeal process unless the liability is paid or a payment arrangement is made with the Department of Revenue.

Facing State Enforcement or Payroll Tax Issues?

If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.

We help with

• State enforcement actions and notices
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• Representation before state tax agencies

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