Collection Assistance Fee Frequently Asked Questions Common Questions What is the Collection Assistance Fee? How is the fee calculated? When is the fee imposed? What do I do to avoid the fee? Does the fee apply if I am paying my taxes under a wage garnishment? Can I appeal the assessment of this fee? Can I have the fee waived? Will the Department refer my debt to a collection agency? What is the Collection Assistance Fee? NC Gen. Stat. §105-243.1 requires the Department of Revenue to assess a 20% fee against a final bill that is at least 60 days past due. The fee is designed to pass some of the costs of collecting overdue taxes along to those who become delinquent rather than using General Fund monies. How is the fee calculated? The fee is calculated on the total amount due including tax, penalty, and interest. The law defines tax, penalty, and interest as tax debt. When is the fee imposed? The Department imposes the fee on a tax debt that is collectible as defined by NC Gen. Stat. §105-241.22, is at least 60 days overdue, and is not the subject of an installment payment agreement. What do I do to avoid the fee? The fee will not apply if the taxpayer either pays the entire balance due online, or establishes an Installment Payment Agreement with the Department, within 60 days after the debt becomes collectible. The fee may be added on defaulted installment payment agreements. Does the fee apply if I am paying my taxes under a wage garnishment? Yes. The fee applies to the amount of the tax debt that remains unpaid as of the day the fee is imposed. Can I appeal the assessment of this fee? The Collection Assistance Fee is a fee and not a tax and is not subject to formal review. A request for review of a tax debt must be made before the tax debt becomes final. The Collection Assistance Fee is imposed after the tax debt is final and collectible. If a taxpayer thinks they do not owe the fee, they can discuss this with a case resolution specialist and he or she will review the matter. If the Department determines that the fee was imposed in error, the Department will remove the fee. The taxpayer must explain why the fee does not apply and provide documentation to support their explanation. For example, if a taxpayer establishes that the tax debt was paid in full before the fee was assessed, the fee does not apply and will be removed. The taxpayer may contact their local service center in order to speak with Department personnel about their account. Review information about the formal tax assessment review process. Can I have the fee waived? The Department may waive the fee if the taxpayer establishes special circumstances that justify the waiver. To request a waiver, write a letter explaining why the Department should waive the fee. Send the letter to: North Carolina Department of Revenue Attn: Director of Collection Division P.O. Box 27431 Raleigh, NC 27611 Will the Department refer my debt to a collection agency? The Department may refer an account to a private collection agency or private attorney in limited circumstances. The taxpayer will be notified if their account is selected for referral. top of page
Collection Assistance Fee Frequently Asked Questions Common Questions What is the Collection Assistance Fee? How is the fee calculated? When is the fee imposed? What do I do to avoid the fee? Does the fee apply if I am paying my taxes under a wage garnishment? Can I appeal the assessment of this fee? Can I have the fee waived? Will the Department refer my debt to a collection agency? What is the Collection Assistance Fee? NC Gen. Stat. §105-243.1 requires the Department of Revenue to assess a 20% fee against a final bill that is at least 60 days past due. The fee is designed to pass some of the costs of collecting overdue taxes along to those who become delinquent rather than using General Fund monies. How is the fee calculated? The fee is calculated on the total amount due including tax, penalty, and interest. The law defines tax, penalty, and interest as tax debt. When is the fee imposed? The Department imposes the fee on a tax debt that is collectible as defined by NC Gen. Stat. §105-241.22, is at least 60 days overdue, and is not the subject of an installment payment agreement. What do I do to avoid the fee? The fee will not apply if the taxpayer either pays the entire balance due online, or establishes an Installment Payment Agreement with the Department, within 60 days after the debt becomes collectible. The fee may be added on defaulted installment payment agreements. Does the fee apply if I am paying my taxes under a wage garnishment? Yes. The fee applies to the amount of the tax debt that remains unpaid as of the day the fee is imposed. Can I appeal the assessment of this fee? The Collection Assistance Fee is a fee and not a tax and is not subject to formal review. A request for review of a tax debt must be made before the tax debt becomes final. The Collection Assistance Fee is imposed after the tax debt is final and collectible. If a taxpayer thinks they do not owe the fee, they can discuss this with a case resolution specialist and he or she will review the matter. If the Department determines that the fee was imposed in error, the Department will remove the fee. The taxpayer must explain why the fee does not apply and provide documentation to support their explanation. For example, if a taxpayer establishes that the tax debt was paid in full before the fee was assessed, the fee does not apply and will be removed. The taxpayer may contact their local service center in order to speak with Department personnel about their account. Review information about the formal tax assessment review process. Can I have the fee waived? The Department may waive the fee if the taxpayer establishes special circumstances that justify the waiver. To request a waiver, write a letter explaining why the Department should waive the fee. Send the letter to: North Carolina Department of Revenue Attn: Director of Collection Division P.O. Box 27431 Raleigh, NC 27611 Will the Department refer my debt to a collection agency? The Department may refer an account to a private collection agency or private attorney in limited circumstances. The taxpayer will be notified if their account is selected for referral. top of page
