Understanding Wisconsin’s tax collection procedures is essential for individuals and businesses with delinquent tax liabilities resulting from unpaid income or franchise taxes. When a taxpayer fails to file or pay by the statutory deadline, the outstanding balance is immediately classified as delinquent. Under state administrative rules, this balance begins accruing interest at an annual rate of 18% and is subject to a delinquent collection fee. Taxpayers have the right to appeal assessments, negligence penalties, and adjustments to withholding reports, but such appeals must be filed within 60 days to preserve procedural rights and avoid escalation.
Once an account becomes delinquent, the Wisconsin Department of Revenue may initiate various statutory enforcement actions. These include filing a tax warrant, which serves as a public lien against real and personal property, the imposition of a warrant fee, and the initiation of wage garnishments of up to 25% of gross earnings. Additionally, the Department may levy financial accounts through one-time or continuous levies and intercept state or federal tax refunds, supplemental security income, child support, or funds associated with joint accounts or spousal assets. Such actions may impact a taxpayer’s creditworthiness and ability to transfer or sell property until the balance is satisfied.
Taxpayers may prevent or suspend collection activity by entering into a formal payment agreement with the Department of Revenue. Payment plans can be initiated online using the taxpayer’s letter ID or submitted by mail with the required fee. Timely payments under an approved installment plan can mitigate additional penalties and fees, provided the taxpayer remains compliant with future filing and payment obligations. If taxpayers have financial difficulties, they can provide documents to show their situation or ask to be considered for the Offer in Compromise program, which might lower the amount they owe.
A tax becomes delinquent in Wisconsin when the due date for filing tax returns or paying the full amount of your income or franchise tax has passed, and any statutory appeal rights have expired. At that point, your unpaid balance is officially converted into a delinquent tax liability and added to your delinquent tax account. Under state administrative rules, the Wisconsin Department of Revenue (DOR) immediately applies an 18% annual interest rate and a delinquent collection fee—equal to 6.5% of the total amount due or $35, whichever is greater—to your outstanding tax debt.
When a taxpayer underpays estimated income or franchise tax by even a small amount, the shortfall immediately becomes a delinquent tax liability once the due date passes.
When you submit tax returns but don’t pay the full amount due by the due date, the unpaid balance immediately transitions into a delinquent tax account. This unpaid balance accrues interest and may incur late filing fees if not resolved quickly.
If the DOR audits your return and assesses additional tax liability—whether for income or franchise tax—it issues a notice with a due date. Failure to pay that assessed balance within 60 days places your account into delinquency.
Non-filers face automatic assessment by the DOR. When you don’t file required tax returns, the department estimates your tax liability, issues an evaluation with a due date, and, if unpaid, converts it into a delinquent tax liability.
After assessment—from a return, an audit, or non-filing—you have 60 days to file an appeal under administrative rules. If you don’t submit an appeal with supporting documents or deny your appeal, the DOR adds a delinquent collection fee and accrues interest at 18% per year.
The DOR adds a fee equal to 6.5% of the total amount due or $35—whichever is greater—when a tax becomes delinquent. This fee compensates for administrative costs and is added to your delinquent tax account.
Interest accrues at an 18% annual rate, calculated monthly on the outstanding delinquent tax liability. Because the rate is compounded, even a few months of delinquency can significantly increase the total cost.
The Wisconsin DOR charges a one-time $20 fee if you enter into a payment plan. This money order–type administrative charge is added to your account upon plan approval.
Should the DOR pursue legal collection actions—such as filing liens or garnishment—the department passes through related court costs, lien filing fees, and garnishment action expenses to your account.
A tax warrant acts as a public record lien against your real property in the county where it’s filed and against personal property statewide.
Upon delinquency, the DOR files a tax warrant with the county clerk of the circuit court. This lien appears on public record and notifies creditors of your outstanding tax debt.
Filing and satisfying a tax warrant incurs a $10 warrant fee. Because a warrant is a public record, it can harm your ability to obtain credit or sell real estate until it is satisfied.
The DOR can garnish wages when collection notices and warrants fail to resolve tax debt.
Garnishment cannot exceed 25% of your gross pay. Wisconsin’s marital property laws also allow the DOR to garnish one spouse’s wages to satisfy the other’s marital debt.
If your spouse owes state taxes, the DOR may collect that debt from your income or joint account, since tax debt is considered marital debt under Wisconsin law.
The DOR may levy funds from your bank or savings account to apply against delinquent taxes.
A one-time levy only captures the balance available when the financial institution receives it. A continuous levy stays in place until the full amount is paid, capturing deposits as they arrive.
Under federal and state law, certain funds—such as supplemental security income, Social Security benefits, veterans’ benefits, railroad retirement, and federal employee retirement benefits—are exempt from levy.
After you file a return or the DOR issues an audit assessment, the department mails a notice specifying your tax liability and due date.
You have 60 days from the notice date to file an appeal of changes to your tax return or account, such as negligence penalties.
If you don’t appeal or pay by the due date, the DOR will add the delinquent collection fee and accrue interest on your total amount due.
Over subsequent months, the DOR may file a tax warrant, initiate garnishments or bank levies, and ultimately proceed to property seizure if you fail to resolve the delinquency.
You may appeal changes to your tax returns, underpayment interest, or negligence penalties—but not statutory interest charges, collection fees, or bank levy actions.
To appeal, submit a written petition—explaining your reasons and including supporting documents—within 60 days of the notice. Use My Tax Account or mail to:
Wisconsin Department of Revenue
PO Box 8903
Madison, WI 53708-8903
You can authorize a third party to represent you by completing Form A-222 (Power of Attorney) or an equivalent notarized document. This ensures your representative can negotiate payment plans or dispute assessments on your behalf.
If garnishment creates undue hardship, request a reduction via My Tax Account (“Manage My Collection”) or submit a Wage Attachment Review Request form with documentation of essential living expenses.
The DOR generally has four years from the later due date or filing date of a return to assess additional taxes. This extends to six years if you underreport more than 25% of your income or the additional tax exceeds $100 for individuals (or $200 for joint returns).
If you fail to file a return or file one with the intent to evade taxes, no statute of limitations applies—the DOR can assess taxes at any time.
While Wisconsin law doesn’t set a clear deadline for collection, tax warrants act as judgments valid for 20 years from filing, during which the DOR can pursue collection actions.
A payment plan is a formal agreement with the Wisconsin Department of Revenue that allows taxpayers to pay delinquent tax liabilities in monthly installments rather than as a lump sum. To initiate a plan, taxpayers must log into My Tax Account using the letter ID provided in their notice, submit a proposed monthly payment amount based on their financial capacity, and pay a one-time $20 processing fee by money order. The total amount due—including principal, interest, and any delinquent collection fees—is divided into equal monthly payments. Although interest continues to accrue at a statutory rate of 18% until the full balance is paid, entering into a payment plan prevents the issuance of new tax warrants, wage garnishments, bank levies, and the interception of federal tax refunds or supplemental security income. Consistently making timely payments and filing all required tax returns helps avoid additional penalties and legal fees while reducing the outstanding tax liability over time.
Payment plans require a one-time $20 fee and timely filing of current returns. Approval depends on the total delinquent tax liability and your ability to make monthly payments.
The DOR continues intercepting federal tax refunds even under a payment plan; however, regular monthly payments can prevent liens and garnishment.
An Offer in Compromise is a legally binding settlement between you and the Wisconsin Department of Revenue that allows you to extinguish your total tax debt for less than the full amount due. By submitting Form A-212 (for individuals) or A-213 (for businesses), you propose a lump-sum payment or structured installments based on what the DOR determines you can reasonably afford. The department reviews your application by examining your income, essential living expenses, real and personal property equity, and any other outstanding obligations—like child support payments or mortgage arrears—to decide if complete collection isn’t feasible.
Individuals use Form A-212; businesses use Form A-213. Both require detailed financial information, including assets, income, expenses, and liabilities.
The DOR evaluates real and personal property equity, future earning potential, and competing creditor priorities. Decisions typically occur within 90 days of a complete submission.
You may request temporary relief if you can’t afford reduced garnishment or payments.
Submit financial statements showing the inability to pay basic living expenses—approval delays further collection actions for a specified period.
Include budgets for housing, utilities, child support payments, medical expenses, and other essential costs to demonstrate hardship.
A self-employed plumber in Madison owed $3,200 after filing three months late. Facing delinquent collection fees and 18% interest, he enrolled in a 12-month payment plan, paying roughly $310 monthly. By acting before a tax warrant was filed, Robert avoided lien costs and garnishment action.
A retail manager in Milwaukee ignored notices about $4,800 in audit adjustments. After a 60-day appeal period, the DOR assessed a delinquent tax collection fee and interest, filed a tax warrant, and garnished 25% of her gross pay. She submitted a Wage Attachment Review Request, documented her household budget, and reduced garnishment to 15% while repaying the balance.
A Green Bay retiree on supplemental security income and a small pension accrued $12,000 in tax debt. After a bank levy, he applied for an Offer in Compromise using Form A-212. The DOR accepted his $4,500 offer—38% of the total—and allowed 12 monthly payments. After completion, the remainder of his liability was forgiven, and the Tax Warrant Act's lien was satisfied.
Wisconsin law does not impose a strict deadline for collection activities. Once a tax warrant is filed with the circuit court clerk, it acts as a judgment valid for 20 years. During this period, the DOR can levy bank accounts, garnish wages, intercept federal tax refunds, and pursue property seizure. For assessments, however, the DOR must act within four years of the due date (six years for significant underreporting) unless fraud or non-filing is involved.
If you cannot pay the full amount due, please contact the Wisconsin DOR promptly to prevent any escalated collection actions. You can set up a payment plan online or via paper, subject to a $20 fee. If your financial situation is dire, consider applying for an Offer in Compromise (Forms A-212 or A-213) to settle your tax debt for less than the total amount owed. If you meet the agreed-upon terms, both options interrupt liens, garnishments, and bank levy actions.
A tax warrant is a public record lien against your real and personal property. It can lower your credit score, complicate refinancing or selling real estate, and remain on your record for up to 20 years. The DOR adds costs for filing and satisfying the warrant, and creditors use public records to assess your creditworthiness. Satisfying the warrant requires paying your total tax liability, collection fees, and interest.
Yes, the DOR can issue a bank levy to your savings or bank account if you fail to resolve your delinquent tax account. A one-time levy captures the funds available at receipt; a continuous levy remains until your balance is paid in full. Certain federal benefits—such as Social Security, Supplemental Security Income, and veterans’ benefits—are protected from levy under federal law.
Never ignore a notice from the DOR. First, review the notice to confirm the assessed tax liability and due date. If you disagree, file an appeal in writing within 60 days, explaining your reasons and attaching supporting documents. If you agree but can’t pay the full amount, enroll in a payment plan or submit an Offer in Compromise application. Early response can prevent delinquent collection fees, interest, liens, garnishments, and levy actions.
Under federal and state law, certain funds in your bank or savings account are exempt from Wisconsin DOR levies. These include Social Security benefits, Supplemental Security Income, veterans’ benefits, railroad retirement and unemployment benefits, and federal employee retirement system benefits. All other deposits—including wages, business income, child support payments, and personal property sale proceeds—are subject to levy.
Schedule your free, confidential tax relief review today.
Copyright © 2025 Get Tax Relief Now
