Default Notice

You received this notice because the Department's records indicate your 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.

Pay the remaining tax liability in full, or take one of the following actions to reestablish your Installment Payment Agreement:

• If you did not pay the required installment payment amount, paid late, or if a scheduled payment was declined: Make the installment payment within 30 days of the date on the Default notice. If the payment is processed timely, the Installment Payment Agreement will be automatically reestablished.
• If you filed a return but did not pay the amount due: Pay the amount due in full within 30 days of the date on the Default notice. After making the payment, call the number on the Default notice to reestablish the Installment Payment Agreement.
• If you did not file a return by the due date: File the return and pay any tax due in full within 30 days of the date on the Default notice. After filing the return and paying any tax due in full, call the number on the Default notice to reestablish the Installment Payment Agreement.

If you do not take one of the actions listed in the What should I do? section, the Department will begin forced collection actions, and you may be charged a 20% Collection Assistance Fee. Examples could include:

• Deducting 10% of the taxpayer's wages paid before deductions
• Freezing funds in the taxpayer's bank account
• Issuing certificates of tax liability (liens)
• Seizing personal or business assets

In most cases, if you do not respond to this notice, you will not be eligible to have the Installment Payment Agreement reestablished.

If you already paid, your payment may have been charged to the taxpayer's bank account but not applied to your account with the Department. Please call 1-877-252-3252 (toll-free) and provide confirmation of the payment.

If you already filed a return, call 1-877-252-3052 (toll-free.) Be ready to provide the confirmation number if the return was filed electronically.