Owing Money to the Indiana Department of Revenue
You owe money to the Indiana Department of Revenue. What should you do?
Pay It Now
If you owe a legitimate balance and have the means to pay it in full, you should do so at your earliest opportunity. The sooner you pay your balance, the less additional interest and penalties you’ll have to pay. You can make your payments by phone by calling 317-232-2240. You can pay online by visiting https://intime.dor.in.gov/eServices.
If You Can’t Pay It Now, Pay It Over Time
If you can’t pay your Indiana tax balance in full immediately, you likely can set up a payment plan. The terms of your payment plan depend on who is collecting your Indiana tax debt. Your Indiana tax debt might be being collected by 1 or more of the 3 agencies listed below. The agency who is collecting your Indiana tax debt depends on how long you have owed your Indiana tax debt.
There are three stages of collection of back Indiana taxes.
1) First, The Indiana Department of Revenue itself attempts to collect your Indiana back tax debt by sending you demands via US Mail. You can set up a payment plan with the Indiana Department of Revenue by calling 317-232-2240 or visiting https://intime.dor.in.gov/eServices. Depending on the amount of tax you owe, you might have up to 36 months to pay off your tax debt. If not paid at this point, your Indiana tax debt becomes an Indiana tax lien. If not paid, tax debt at this stage attaches to real estate owned in your county, complicates Indiana professional licensing, and complicates the sale of motor vehicles if not paid. If The Indiana Department of Revenue doesn’t collect the tax debt, then the debt moves to your Indiana County’s Sheriff Department.
2) Next, your Indiana County’s Sheriff Department attempts to collects Indiana back tax debt by sending you demands via US Mail or hand delivery. As your Indiana County Sheriff is now collecting the debt, s/he will be motivated by collecting their collection fee for doing so. Your Indiana County Sheriff’s payment options vary greatly: you might be offered an option to pay over 6 months, but sometimes your Indiana County Sheriff wants payment in full immediately. Your Indiana County’s Sheriff Department might set a hearing that you are required to attend if you have not made payment arrangements. Some Indiana County Sheriff Departments (such as Marion County) issue bank levies and wage garnishments. If your Indiana County’s Sheriff doesn’t collect the tax debt, then the debt moves to United Collection Bureau, Inc.
3) Lastly, United Collection Bureau, Inc (“UCB”) attempts to collect Indiana back tax debt by sending you demands via US Mail and calling your telephone. UCB routinely issues bank levies and wage garnishments. If UCB levies your bank account, you will be forced to pay an amount equal to the amount they have frozen in your bank account to be able to unfreeze your account. You have limited payment options with UCB. Sometimes nothing less than immediate full payment will stop collection actions by UCB, while other times you might have to pay a substantial down payments followed by a short period of months’ repayment.
What if Indiana Department of Revenue says that I owe it money, but I don’t think I owe it or I think I owe a lot less that the bill I was sent?
When you don’t file a tax return (or sales, withholding, or food and beverage voucher), Indiana Department of Revenue can (and usually does) file a tax return on your behalf. These “estimated” or “best information available” returns typically create balances that are vastly overstated. If you were to file an actual tax return to replace the Indiana Department of Revenue’s estimated return, your balance would be greatly reduced or even eliminated.
Why am I getting calls from United Collection Bureau, Inc?
If you are a current or former Indiana resident who does, or might, owe the Indiana Department of Revenue tax debt, United Collection Bureau, Inc (“UCB”) is calling you to attempt to collect Indiana taxes. UCB is a debt collection company that services student loan debt and tax debt. UCB is the sole collection agency hired by The Indiana Department of Revenue to collect back taxes. Their collection methods are very aggressive and typically involve bank levies and wage garnishments.
I received a tax warrant from my Indiana County Sheriff’s Department. Are they coming to arrest me?
No. In Indiana, a tax warrant is just another name for a tax bill. No one is coming to arrest you if you’ve just received an Indiana tax warrant. However, if your County Sheriff sets a time/location for you to appear to discuss payment of your tax bill, unless you have a discussion with their office and your presence isn’t required, you must attend and meet with your Sheriff’s department about your tax bill. Your failure to appear at a meeting/hearing to discuss your tax debt set by your County Sheriff’s could result in a Bench Warrant.
What if I can’t fully pay my back Indiana taxes or even afford the payment plans offered by the Indiana Department of Revenue, my Indiana County’s Sheriff Department, or United Collection Bureau, Inc?
You still have options.
1. Get Outside Help – Consult with a tax attorney, experienced in dealing with back Indiana taxes. If you are in an emergency situation where you are unable to fully pay your tax debt, you are likely juggling IRS tax debt, Indiana tax debt, and other expenses. It’s best to determine a strategy that takes into account your entire financial picture. Hiring a tax attorney to create and implement this strategy can save you enormous amounts of heartache, time, and money.
2. Go To The Source – The Indiana Department of Revenue’s Taxpayer Advocate Office (https://www.in.gov/dor/3883.htm) helps the people who owe Indiana taxes, but aren’t able to pay taxes in full or according to the payment options given by The Indiana Department of Revenue, the Indiana County Sheriff, or United Collection Bureau, Inc. This office is understaffed, its paperwork requirements are steep, but its assistance to Indiana taxpayers is invaluable. While its help might not be immediate (this is a problem when you have a bank levy or wage garnishment), if you provide it the paperwork it requests, the Taxpayer Advocate Office will be able to assist you.