Enforced collection of taxes can be initiated as soon as the account becomes delinquent. Legal actions may include, but are not limited to, garnishment of wages, attachment of bank accounts and rents, seizure and sale of personal property, and foreclosure and sale of real property.
Other examples of funds that the tax office can attach include state income tax refunds, monies due to owners of low-cost housing as subsidies for rent, and monies awarded to taxpayers through judgments ordered by a court as a result of a lawsuit.
NCGS 105-368(a) gives the tax collector the authority to “attach wages and other compensation, rents, bank deposits, the proceeds for property subject to levy, or any other intangible personal property, including property held in the Escheat Fund”. When wages are attached the garnishee (employer) is required to send not more than 10% of the employee’s gross wages for any one period. In the case of a rent, bank or other attachment, all funds due or being held on behalf of the taxpayer must be paid up to the amount of debt owed to the Tax Collector’s Office.
If you have received a copy of a Notice of Attachment and Garnishment from the Tax Collector’s Office, this means that we have already notified the garnishee (holder of funds due you).
Within ten days of receiving service of the notice, the garnishee (recipient of the notice and holder of funds) must either notify the Tax Collector’s Office of any reason they cannot honor the attachment, or begin remitting to the Tax Collector the funds attached.
If the recipient of the notice has not responded within 15 days after service of the notice, the tax collector may file a copy of the notice, along with a written statement that the garnishee has not responded and request for judgment, with the appropriated pision of the General Court of Justice of the County in which the garnishee resides. The issues shall be tried as in civil actions, under NCGS 105-368(e).
A $15 to $30 garnishment fee is assessed against the taxpayer to cover the administrative costs of the attachment/garnishment action.
Occasionally, the Tax Collector’s Office will receive a payment from a garnishee after the taxpayer has voluntarily paid everything due under the attachment. Upon receiving these funds, the Tax Collector deposits them into the bank account for their office. If there are other bills due for the taxpayer at that time, the funds will be used to pay that bill. If there are NO bills due a refund is issued to the taxpayer.
If the holder of funds is your employer: They will be required to withhold 10% of your gross wages per pay period until the taxes and interest and service fee are satisfied. Service fees range from $15 to $30.
Example: If your gross wages are $1000.00 every two weeks, your employer will withdraw and send to the Tax Collector’s Office $100.00 from each paycheck until the garnishment is paid and satisfied.
If you choose to voluntarily pay the taxes plus our fee, you must do so in our office with cash, money order or a cashier’s check. Upon receiving your payment in full, the Tax Collector will send a Request for Release of Attachment and Garnishment to your employer. You may voluntarily make a partial payment or pay the balance in full at any time during the garnishment period.
Example: If one of the tax bills under garnishment is for a vehicle, and the tag has expired, you may pay that bill and receive the MAV-2 Form as proof of payment as required by the NCDMV to renew your registration.
If the holder of funds is your bank: They will immediately place a hold on any funds on deposit with that bank up to the amount needed to satisfy the debt. After the 10 days have passed, the bank will withdraw the funds and send them to the Tax Collector’s Office. At that time, the bank will release the hold on your accounts.
There will be a service fee included in the amount that is attached. The fee ranges from $15 to $30. Note that financial institutions often also charge you a fee for processing the attachment. If you choose to voluntarily pay the taxes plus our fee within the 10 days, you must do so in our office with cash, money order or a cashier’s check. Upon receiving your payment, the Tax Collector’s Office will send a Request for Release of Attachment and Garnishment to your bank and the hold on your accounts should be immediately removed. Your bank may still charge you a service fee. Our Request for Release will have no bearing on the bank’s charges.
If the holder of funds is your renter: They will be required to send to the Tax Collector’s Office their total rent payment each month until the taxes, interest and fee are paid and satisfied. Fees range form $15 to $30.
If you choose to voluntarily pay the taxes plus our fee, you must do so in our office with cash, money order or cashier’s check. Upon receiving your payment, our office will send a Request for Release of Attachment and Garnishment to your renter. You may voluntarily make a partial payment or pay the balance in full at any time during the garnishment period. These payments must be made to the Tax Collector’s Office.
Debt set-off allows cities and counties to submit outstanding delinquent taxes or other debt owed the county or city of more than $50.00 to the NC Department of Revenue.
The NC Department of Revenue will then match these debts to the inpidual state income tax refunds.
Once a match is made the amount of the debt will be deducted from the state income tax refund and sent to the appropriate department in the county or city that submitted the debt.
A $15.00 fee will also be deducted from the state income tax refund. The county or city does not receive this fund. The fee is for the clearinghouse that has contracted with the NC Department of Revenue to handle this service.