Wisconsin Taxing Information
A bank levy is one of the administrative collection actions that may be taken by the Department of Revenue to satisfy unpaid taxes. If you have not voluntarily taken steps to resolve your tax liability, the department may send a notice to your financial institution indicating the amount of the levy and entitling the bank to receive all money in any of your accounts up to the amount of the levy.
A bank levy is a single action. This means that if the amount levied does not satisfy the tax liability, the department may issue another levy in order to receive amounts deposited with the bank after receiving the first levy.
Delinquent Taxpayer List
The Wisconsin Department of Revenue maintains and posts a list on the Internet of all delinquent taxpayers who owe more than $5000 (including tax, penalties, interest and other costs) and the amount is still unpaid more than 90 days after all appeal rights have expired.
Enforced collection actions that the department may use include (but are not limited to) wage attachments, levies, seizure of property, collection agencies, license or permit revocation and personal liability assessment in corporate situations.
Fees & Costs
If you arrange an installment agreement with the department you will be charged a $20 installment agreement fee.
Any expenses associated with enforced legal action used to collect the delinquent taxes will be added to your tax bill. This may include lien fees, garnishment fees, court fees and other costs.
If you fail to file your taxes on time, you may be subject to a late filing fee of up to $30 and a negligence penalty of 5% per month of the tax owed, up to a maximum of 25%.
If you cannot pay the full amount due on your taxes, you should still file on time and pay as much as you can to avoid late filing penalties and charges. You will receive a tax bill for the unpaid balance and may request an installment agreement through the Department of Revenue. You will be required to provide financial information and a revenue agent will negotiate the terms with you. The unpaid balance is subject to interest of 18% per year, as well as penalties and fees, such as $35 or 6 1/2% of the unpaid amount, whichever is greater.
While you are in an installment agreement with the department you are required to make your payments on time and to file and pay all other tax liabilities on time. As long as you do this, the department will not take further collection actions. They may, however, file a delinquent tax warrant and intercept any subsequent refunds to apply to the balance. If you fail to comply with the agreement, further enforced collections may begin.
An interest rate of 18% per year is charged on any balance of tax due to the Wisconsin Department of Revenue.
Notice of Informal Hearing
A Notice of Informal Hearing is a collection notice that is issued to taxpayers who have not voluntarily made arrangements to satisfy a delinquent tax debt. The hearing is not held in court, but rather is intended to provide the taxpayer with an opportunity to resolve the liability with a revenue agent, before enforced collection actions begin.
If you have delinquent taxes with the state of Wisconsin, the department may revoke, suspend or deny occupational licenses until you pay in full or come to an acceptable agreement with the department.
Petition for Compromise
If you have delinquent taxes and have very limited resources, or your tax obligation is so much that you may never be able to repay it, you may qualify for a compromise of taxes. You may petition for a compromise of taxes in which the department will review your financial situation and determine if you are able to dispose of or borrow against assets or if you have sufficient funds to pay your liability through an installment agreement. If you do qualify for a compromise of taxes you may be able to satisfy your tax liability for a lesser amount than your total obligation.
Power of Attorney
You may choose to have an authorized representative act on your behalf regarding your tax issues before the Wisconsin Department of Revenue by filing a Power of Attorney, Form A-222, or comparable form with the required information.
A debtor who repeatedly fails to pay sales tax, withholding tax or dry cleaner tax will be subject to a 25% repeat penalty. Repeated failure means that within the previous 25 months, the debtor failed to pay the same tax type on at least 3 occasions. If this occurs, a warning letter will be mailed at least 10 days before the next filing is due. After the warning, if the debtor is late a fourth time, a penalty of 25% of the unpaid tax will be assessed.
Revoked Sales Tax Permits
You may incur successor liability if you purchase a business that has not filed or paid all of their sales and use taxes, making you personally responsible for the tax debt. You may request a clearance certificate to ensure that all sales and use returns have been filed and paid.
A tax warrant may be filed after you have not paid your taxes in full by the due date. A tax warrant is a public record of the amount you owe and can affect your ability to sell real estate or obtain credit. The cost of filing and satisfying the warrant will be added to your delinquent tax bill. All delinquent liabilities are subject to having a tax warrant filed.
Wage certification is an enforced collection action used by the department when you have not voluntarily resolved your tax debt. The Department of Revenue can require your employer to withhold up to 25% of your gross pay to apply to your liability. The wage certification will remain in place until the balance is paid in full. Wisconsin considers tax debt to be marital debt and your income to be marital income, so if your spouse has debt with the department, your wages could be attached to a wage certification.