In order for New York State to have legal authority to pursue collection against the taxpayer’s real and personal assets on an unpaid tax, the State must first file a tax warrant.
The tax warrant remains in effect until the underlying tax liability is completely satisfied, or the warrant expires. A tax warrant is public record, on file at the County Clerk’s Office and with the Secretary of State, and could adversely affect a taxpayer’s credit rating.
There is a twenty-year statute of limitations on collection in NYS and the period begins to run on the first day a tax warrant could be filed by the Tax Department. After a tax warrant is filed, NYS may proceed with collection action, including bank levies. NYS does not provide the taxpayer advance notice of issuance of a levy.
NYS may impose a levy via wage garnishment, known as an income execution. The execution is limited to ten percent of the taxpayer’s wages and remains in place until the tax liability is fully paid. NYS does not levy retirement funds or pensions.
For the more extreme cases, NYS may seize real or personal property (not exempt by law) for sale at a tax auction. During seizure, NYS tax compliance agents may change the locks and padlock the door at the taxpayer’s place or business. Alternatively, agents may remove all of the taxpayer’s merchandise and store it elsewhere until the date of sale.
Dealing with NYS collection matters can be very stressful. Kindly contact us to discuss your rights and options if you are facing collection action.
Hotel Operators Personally Liable for Sales Taxes For Periods When Lender Had Assumed Control of Hotel and Revenues