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Can Indiana Issue a Warrant for Unpaid Taxes?

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Dealing with unpaid taxes has the potential to cause major headaches. You not only have to worry about the Internal Revenue Service (IRS), but also the rules enforced by the state where you reside.

Unfortunately, Indiana is one of the more extreme states when it comes to dealing with back taxes.

Indiana has guidelines in place that allow the state to issue a warrant for unpaid taxes. You will want to avoid this scenario at all costs. That’s why speaking with a seasoned tax professional is your best option.

Indiana Department of Revenue (DOR)

The Indiana Department of Revenue (DOR) has the right, under certain parameters, to issue a tax warrant. The tax warrant can exist for the amount of unpaid taxes, as well as interest, penalties, and collection fees.

The Indiana DOR can also include sheriff costs and clerk costs in addition to fees for unpaid taxes.

A tax warrant is threatening legal action. It means that the state government has placed a tax lien on your personal property and assets. It allows the government to seize the property as collateral to collect unpaid taxes. A warrant is also public record, which can be damaging to your future job prospects or credit checks. It can also affect any business relationships you may have.

Receiving a warrant is a serious matter that you will want to address immediately. Ideally, you’ll know the warrant is coming before it’s issued and can resolve any issues before the state takes action. There are other avenues to resolve tax debt before it gets to the serious dilemma of a warrant. Speaking with a tax professional can help you avoid life-altering repercussions.

Indiana DOR Collection Process

The Indiana Department of Revenue will first contact you about unpaid taxes via mail. Prompt action is mandatory as the Indiana DOR expects a reply within 10 days.

If the taxpayer fails to respond, state law allows the DOR to enforce liens on personal property. It can include seizing a business related to the taxpayer. Tax liens negatively affect credit ratings. It can make it nearly impossible to borrow money in the future.

A tax warrant issued by the Indiana Department of Revenue will also add 10 percent to the unpaid tax as a collection fee. The turnaround on tax warrants is quick as county courts can approve one in as little as 20 days after the initial demand is sent to the taxpayer.

Warrants are court-approved actions that grant agencies certain powers. Therefore, by the time a warrant is issued, the DOR can take enforceable action on your personal property.

The result of a tax warrant in Indiana is a domino effect that can make a bad situation even more severe. Often, at this point, taxpayers have serious problems ever getting right with state and/or federal governments.

Indiana DOR Automatic Judgments

The biggest problem with a tax warrant in Indiana is the state considers it an “automatic judgement”. What that means is, the warrant can get issued without a trial before the circuit court. 

Automatic judgements are designed to streamline procedures in overworked courts. The problem with them, from the perspective of the taxpayer, is it provides you very little opportunity for defense.

Tax warrants in Indiana are also longstanding. A judgment issued in court is valid for 10 years. Furthermore, the courts may renew a judgment for an additional 10 years after the original deadline.

It essentially provides the Indiana Department of Revenue 20 years to foreclose on a property and sell it to the highest bidder in a public auction. You could lose your home or business through an Indiana tax warrant.

At the very least, it will damage your credit history and make it very difficult to receive a new home loan or business loan in the future.

Avoid Indiana Tax Warrants

Indiana County Sheriff departments have an incentive to enforce tax warrants, as they are entitled to a portion of the 10 percent collection fee on the unpaid taxes. Consequently, it is considered a quick avenue for revenue.

The streamlined, expedited “automatic judgement” process for issuing tax warrants in Indiana provides you very little time to put up a defense. If you have a tax debt in the state of Indiana do not hesitate to find a good tax attorney.

Contact Levy & Associates today for a free initial consultation. We can help you reach a resolution before a tax lien is placed on your personal property. We are available by calling 800-TAX-LEVY, or visiting www.levytaxhelp.com.

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