NC Gen. Stat. §105-243.1 requires the Department to assess a 20% fee against a final bill that is at least 90 days past due. The fee is designed to pass some of the costs of collecting overdue taxes along to those who become delinquent rather than using General Fund monies. It provides funds to pay for the following:
- The fees charged by contract attorneys and collection agencies that help the Department collect tax debts.
- Personnel at the Department that collect taxes.
- Other costs associated with collecting delinquent taxes.
- NC Department of Revenue infrastructure projects as approved by both the NC General Assembly and the Governor.
How is the fee calculated?
The fee is calculated on the total amount due including tax, penalty, and interest. The law defines tax, penalty, and interest as tax debt.
When is the fee imposed?
The Department imposes the fee on a tax debt that is collectible as defined by NC Gen. Stat. §105-241.22 , is at least 90 days overdue and is not the subject of an installment payment agreement. The Department sends every taxpayer a letter 30 days before the fee is imposed that warns the taxpayer of the fee and tells the taxpayer how to avoid the fee.
What do I do to avoid the fee?
If you received a letter warning that a 20% fee will be imposed if you do not pay your tax debt in 30 days, then you must do one of the following within 30 days of the date the letter was sent to avoid the fee:
- Pay the TOTAL FEE amount shown on the letter.
- Enter into an Installment Payment Agreement with the Department.
Does the fee apply if I am paying my taxes under a wage garnishment?
Yes. The fee applies to the amount of your tax debt that remains unpaid as of the day the fee is imposed.
Can I appeal the assessment of this fee?
The collection assistance fee is a fee and not a tax and is not subject to formal review. A request for review of a tax debt must be made before the tax debt becomes final. The collection assistance fee is imposed after the tax debt is final and collectible. Click hereto learn more about the formal tax assessment review process.
If you think you do not owe the fee, you can discuss this with a case resolution specialist and he or she will review the matter. If the Department determines that the fee was imposed in error, the Department will remove the fee. You must explain why the fee does not apply and provide documentation to support your explanation. For example, if you establish that you paid your tax debt in full before the fee was assessed, the fee does not apply and will be removed. Contact the local Collection Division Office serving your area and tell the Department personnel that you need to speak with someone about your account.
Can I have the fee waived?
The Department may waive the fee if the taxpayer establishes special circumstances that justify the waiver. To request a waiver, write a letter explaining why you think the Department should waive the fee. Send the letter to:
North Carolina Department of Revenue
Attn: Director of Collection Division
P.O. Box 27431
Raleigh, NC 27611
Will the Department refer my debt to a collection agency?
The Department may refer an account to a private collection agency or private attorney in limited circumstances. You will be notified if your account is selected for referral.