Attachment and Garnishment of Bank Accounts: NC Department of Revenue Collection Practices
The IRS has a resounding reputation as the tax collecting body to be feared in the United States. It is the North Carolina Department of Revenue (“NCDOR”), however, that should properly be placed on the section of the map marked “Here Be Dragons.” One of the NCDOR’s most effective powers is the Attachment and Garnishment notice. And the NCDOR is certainly not afraid to use it.
Upon failure to pay the NCDOR on the tax due date, a taxpayer is first sent a Notice of Collection requesting the unpaid amount be paid. The notice ominously mentions “no further notice will be issued before legal action may begin” and makes reference to the NCDOR’s ability to garnish wages and withdraw funds from the taxpayer’s bank account, an action that “may cause the bank to freeze funds in the account.” If the taxpayer does not pay in full or enter into an installment agreement with the NCDOR within a few months after receiving the notice, the NCDOR will proceed as indicated.