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When You Don’t Pay Your Tax Bill

Note: You will not need to read this section if you have already paid your tax or if you have made arrangements. Please note that before we take any of the actions explained in this section, we try to contact you and give you the opportunity to pay voluntarily.

If you do not take some action to pay your tax bill, we may take any of the following actions:

  1. File a Notice of judgment;
  2. Serve a Notice of Warrant;
  3. Seize and sell your property (personal, real estate, and business property);
  4. Notify payers of your interest and dividend income to begin backup withholding; or
  5. Assess 100 percent penalty if you owe withholding taxes.

These actions are referred to as Enforced collection Actions; because they are the means by which the Division of Revenue can enforce the notice and demand for tax.

Notice of Judgement

This section gives information to help you understand what a judgment is, how it affects your credit rating and how it is released.

Before the Division of Revenue files a Notice of judgment, three requirements must be met: The Division of Revenue must assess the tax, or be self-assessed by the taxpayer (i.e., filing a timely return without paying or partially paying);The DE DOR must send you a notice and Demand for payment; and You must neglect or refuse to pay the tax or Otherwise resolve your tax due problems.

Once these requirements are met, a judgment is created for the amount of your tax debt. This judgment attaches to all your property (such as your house or car) and to all your rights to property (such as your accounts receivable).

A judgment is not valid against the claims of other creditors until the Division of Revenue files a Notice of judgment with an appropriate official to establish priority status among these creditors. An example of this is filing a judgment in the county where you own property or in the state where you conduct business.

By filing a Notice of judgment, the Division of Revenue is providing a public notice to your creditors that the Government has a claim against all your property, including property that you acquire after the lien was filed.

Caution: Once filed, a judgment will harm your credit rating.

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