This notice is sent because the Department has placed the taxpayer's Installment Payment Agreement in a default status. An Installment Payment Agreement is also known as a payment plan. The taxpayer should take one of the actions listed in the What should I do? section below. The Notice ID is N0012901 or N0012902.
About Your Notice
The taxpayer received this notice because the Department's records indicate the taxpayer's Installment Payment Agreement may default. Review the terms of an Installment Payment Agreement:
As part of the Installment Payment Agreement, the taxpayer must:
- File and pay all tax returns in full: The taxpayer must continue to file and pay all tax returns in full during the entire term of the installment payment agreement.
- Have a bank account: The taxpayer must list a checking or savings account on the installment payment agreement request form.
- Allow bank drafts: The taxpayer must allow the Department to draft the scheduled payment from the taxpayer's bank account. Failure to make a scheduled payment, or if a payment is returned to the Department from the taxpayer's bank or financial institution, the agreement will be in default.
- File and pay estimated income taxes: The taxpayer must remain current in paying estimated income taxes, and enter the correct filing status and number of allowable exemptions on their NC-4s.
- Provide additional information, as needed: The taxpayer must provide the Department with any additional information if requested. The Department may perform periodic reviews of the taxpayer's financial condition during the term of the agreement to determine continued need as well as possible jeopardy of collection.
If the taxpayer cannot meet these requirements when the payment plan is set up, or any additional requirements thereafter, then the payment plan will be in default. The taxpayer will not be able to reestablish an agreement once it is in default.
Take one of the following actions to reestablish the taxpayer's Installment Payment Agreement:
- If the taxpayer did not pay the required installment payment amount, paid late, or if a scheduled payment was declined, they must make the installment payment within 30 days of the date on the taxpayer's notice. If the taxpayer's payment is processed timely, the taxpayer's Installment Payment Agreement will be automatically reestablished.
- If the taxpayer filed a return but did not pay the amount due, they must pay the amount due in full within 30 days of the date on the taxpayer's notice. After making the payment, call the number on the taxpayer's notice to reestablish the Installment Payment Agreement.
- If the taxpayer did not file a return by the due date, they must file the return and pay any tax due in full within 30 days of the date on the taxpayer's notice. After filing the return and paying any tax due in full, they must call the number on the taxpayer's notice to reestablish the Installment Payment Agreement.
Review the detailed information on the taxpayer's notice, or call 1-877-252-3252 (toll-free) if you have additional questions.
Understanding Your Notice - Default Notice
If the taxpayer did not take one of the actions listed in the What should I do? section, the Department will begin forced collection actions and the taxpayer may be charged a 20% Collection Assistance Fee. Examples of forced collection actions could include:
In most cases, if the taxpayer does not respond to this notice, the taxpayer will not be eligible to have the Installment Payment Agreement reestablished.
If the taxpayer has already filed a return, call 1-877-252-3052 (toll-free.) Be ready to provide the confirmation number if the return was filed electronically.
If the taxpayer has already paid, the taxpayer's payment may have been charged to the taxpayer's bank account, but not applied to the taxpayer's account with the Department. Call 1-877-252-3252 (toll-free) and provide confirmation of the payment.