North Dakota State Tax Lien Checklist: Understanding
State Enforcement
Introduction
A state tax lien is a legal claim the North Dakota Office of State Tax Commissioner places against your property when you owe unpaid state taxes. This claim gives the state the right to your assets if the tax debt remains unpaid. A lien can affect your ability to borrow money, sell property, or refinance existing debt.
What This Issue Means
A state tax lien is a formal notice filed by North Dakota stating that you owe unpaid state taxes.
The lien creates a legal claim against your real and personal property, including bank accounts, vehicles, equipment, and other assets. Once filed, the lien gives the state priority to collect payment from these assets before other creditors.
Why the State Issues a Tax Lien
North Dakota files a tax lien when a taxpayer has an unpaid tax debt that remains outstanding after standard collection efforts. The state typically issues this action after sending payment notices and notices of intent to enforce. Filing a lien is the state’s formal legal step to secure its claim against your property.
What Happens If This Is Ignored
If a tax lien remains unpaid and unaddressed, the state may pursue additional enforcement actions, such as wage garnishment, bank levies, or property seizure and sale. The longer the lien remains unpaid, the more your financial situation may worsen. The state may also add interest and penalties to your original tax debt.
Step-by-Step Checklist: What to Do After Receiving a
Lien Notice
Step 1: Locate and Review the Lien Notice Carefully
Read the entire notice from start to finish and identify the tax year or period covered by the lien.
Note the total amount owed, including penalties and interest, and write down the notice date and any deadlines mentioned.
Step 2: Verify the Accuracy of the Debt Information
Compare the tax period listed to your own tax records and check whether you filed a return for that tax year. Review any prior notices you received regarding this debt, and list any discrepancies or questions you have.
Step 3: Locate Your Original Tax Return and Payment Records
Find your filed tax return for the year in question and gather copies of any payments you made to North Dakota. Collect bank statements or cancelled checks showing tax payments, and organize them in chronological order.
Step 4: Calculate What You Believe You Actually Owe
Add up all payments you made for the tax period and note the date each payment was submitted. Compare your calculation to the amount shown on the lien notice, and note any amounts that do not match.
Step 5: Contact the North Dakota Office of the State Tax Commissioner
Call the Collections section at 701-328-1244 during business hours with your Social Security number or tax identification number ready. Ask the representative to explain the debt and confirm what you owe, then request a detailed account statement showing the current balance, penalties, and interest.
Step 6: Request a Payment Plan or Installment Agreement
Ask the Office of State Tax Commissioner whether you qualify for a payment plan and inquire about the process for setting up monthly payments. Ask what information or documentation you need to provide and whether setting up a payment plan will affect the lien status.
Step 7: Explore Hardship or Abatement Options
Ask whether penalty abatement is available based on your circumstances and inquire whether the state considers reasonable cause for late payment. Ask for the documentation you need to submit for a hardship claim, and understand that approval is not guaranteed.
Step 8: Gather All Documentation Related to Your Request
Compile proof of prior payments, organize your tax returns for the years in question, and collect written correspondence from the state about this debt. Prepare a written explanation of any errors or circumstances and make copies of everything before submitting.
Step 9: Submit Your Documentation According to State Instructions
Follow the state’s specific instructions for submitting documents and use the address or submission method provided by the Office of State Tax Commissioner. Send documents by certified mail with a return receipt requested and keep copies of everything you submit.
Step 10: Follow Up If You Do Not Receive a Response
Response times vary, but if you receive no response after a reasonable period, contact the
Office of State Tax Commissioner again. Provide your name, Social Security number, and the lien notice number, then ask for the status of your request or submission.
Step 11: Monitor Your Financial Accounts
Check public records at your county recorder’s office for the tax lien listing and review your bank statements for any unexpected activity. Keep records of any accounts that show sudden changes and report unauthorized activity to your financial institution immediately.
- Ignoring the lien notice completely: Not responding or taking action worsens the
- Failing to respond to follow-up notices: The state typically sends additional notices as
- Providing incomplete or inaccurate information: Double-check all documents before
- Not keeping copies of your submissions: Always maintain records of what you send
- Assuming the lien will go away on its own: A tax lien remains in effect until the debt is
- State tax notice review and response
- Penalty and interest reduction options
- Payroll and trust fund tax assistance
- Payment plan and relief eligibility review
- Representation with state tax agencies
Step 12: Maintain All Correspondence and Records Indefinitely
Keep copies of all state notices and save all payment records and receipts. Organize documents by tax year and type, create a backup copy of important documents, and store originals in a safe location.
Common Mistakes to Avoid situation and may trigger additional enforcement actions such as wage garnishment or asset seizure by the state. deadlines approach, and failure to respond can result in immediate asset seizure or other collection actions. submitting, as incorrect information delays processing and may result in the denial of your request for payment arrangements or hardship consideration. to the state and when you sent it to protect your rights and document your compliance efforts. paid in full or the state releases the lien formally through official channels.
Frequently Asked Questions
How Long Does a North Dakota Tax Lien Remain on My Record?
North Dakota tax liens typically remain in effect until the debt is paid in full or the state formally releases the lien. Specific timeframes depend on the type of tax and the circumstances of the debt. Contact the Office of the State Tax Commissioner for details about your particular lien.
Will a Tax Lien Appear on My Credit Report?
As of April 2018, the three major credit bureaus no longer include tax liens on consumer credit reports. However, the lien remains a public record at your county recorder’s office, and lenders may still search public records independently when evaluating your creditworthiness.
What Is the Difference Between a Tax Lien and a Tax Levy?
A tax lien is a legal claim against your property to secure payment of the debt. A tax levy is the actual action of seizing your assets, wages, or bank account to pay the debt. The state can issue a levy without first filing a lien.
Closing
A tax lien is a serious enforcement action that requires immediate attention and response.
Understanding what a lien is, why it was filed, and what options are available helps you take informed next steps. Contacting the Office of State Tax Commissioner to discuss your debt and explore resolution options is essential.
Received a State Tax Notice?
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.
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