How To Respond To a Notice of State Income Tax Due

When you receive a notice of state income tax due, it can be unsettling, especially if you filed your tax return and paid the tax due. Even if you thought everything was accurate, there may be something you missed. So when a notice of taxes due arrives in the mail from your state's tax authority, what should you do? You'll want to act fast so that it doesn't result in a tax lien. You may also need the help of a professional. Taking some of these basic steps can help resolve the issue in the most positive way possible.

Key Takeaways

• A notice of state income tax due is sent to taxpayers from a state government tax authority if and when the agency believes taxes still need to be paid.
• It's important to gather evidence like tax returns, tax payments, forms, and more to help make a case for yourself if you believe the notice is incorrect.
• If the notice of taxes due is not easy to understand, it's wise to ask a tax professional or someone you trust for help.
• If you do still owe tax money and can pay it soon after you receive the notice, you could save yourself from having a tax lien put in place.

Notice of State Income Taxes Due

A notice of state income tax due is just one type of notice a state government tax authority may send you. It will state that you owe the state government tax money, even if you've already filed your state tax return. The notice will likely include a payment voucher and a summary of the balance due.

For example, California's Franchise Tax Board lists nearly three dozen notices it may send, covering everything from requests for additional documentation to confirming whether or not you will be itemizing deductions.

Steps for Responding to a Tax Notice

Act Fast

Don’t put the notice aside for later. Read it carefully and make sure you understand what it says. If you can respond to the notice immediately, do it because it could escalate into second and third notices, or result in a tax lien eventually.

If you agree with the notice and understand it, you should be able to take action fairly quickly. Many websites allow you to upload documents or make payments, which could be much faster than mailing in forms and payment vouchers.

If you believe the notice is inaccurate, you'll need to start gathering evidence.

Gather Evidence

You must have documentation to support your claim. For example, make sure you have bank records to back up your claim if the state is saying that you didn’t make a payment when you actually did. A canceled check is best, but a bank statement will do if you paid electronically.

You may also need tax documents, your Social Security number, and other personal information.

Ask a Professional for Help

If you feel like you’re in over your head, consider contacting a tax professional. You should definitely have a professional advocating on your behalf if you’re trying to dispute something based on an interpretation of a state tax law or if you're dealing with the IRS.

Contact an enrolled agent (EA), a certified public accountant (CPA), or a tax attorney before you do anything. These professionals are permitted to represent you before your state tax agency or the IRS.

Note

If the issue is a missing form or something just as simple, you can try to resolve the issue on your own, working with state tax officials directly. You may not need the help of a professional.

The Taxpayer Advocate Service (TAS) can help with tax disputes with the IRS and might be able to steer you to a professional to help with state tax matters.

Ask a Lot of Questions

If you contact the state tax authority yourself to discuss the notice, be sure to ask a lot of questions so that you have all of the information you need. If you're able to speak with someone on the phone, get their name and information in case you need to attribute anything back to them in the future.

Find out whether there's a specific procedure for appealing a tax assessment, what type of documentation you'll have to provide, and to what address you should send a protest letter.

Write a Letter

A letter can present a persuasive argument for your case, but make sure you have evidence to support all your claims.

It's absolutely essential to include the Social Security number or other tax ID number that you used on the tax return in question. You'll also need the notice number if it's included in the notice you received. It's possible that no one will be able to help you if you can't provide this information.

Be sure to attach copies of your relevant documentation, and note the attachments in the letter. Mail the letter by certified mail so you can be sure it's delivered and signed for. The IRS provides a list with other contact information for all states via their websites.

Note

If you owe money, make the payment in full. If you can't make it in full, do not send partial payment. Contact a tax professional who can help guide you through the process of asking for an extension if you need more time to collect the money to pay your state tax bill.

Follow Up

Wait a couple of weeks for your letter to be processed, then follow up with a phone call if you haven't received a response. Some states enter correspondence into a computerized registry. They might be able to tell you whether your correspondence was received and who is handling it.

Frequently Asked Questions (FAQs)

What is a state income tax balance due notice?

A state income tax balance due notice is a document that says you still owe taxes to your state's tax authority. It will be mailed to you and it will likely include a summary of the balance due as well as information on how you can pay or dispute it.

What do you do if you get a tax notice?

After you get a tax notice in the mail, respond to it as soon as you can with documents supporting your case. If you agree with the notice and realize that you do in fact owe taxes still, pay them as soon as you can. If you disagree with the notice, gather documents that can show the tax agency that it made a mistake.

The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

1. State of California Franchise Tax Board. "Notice of State Income Tax Due."
2. State of California Franchise Tax Board. "Letters: Personal and Business Notices."
3. IRS. "Understanding Tax Return Preparer Credentials and Qualifications."
4. USA.gov. "Resolve Tax Disputes."
5. New York State Department of Taxation and Finance. "Disagree With a Bill or Action."

• About Us
• Privacy Policy
• Editorial Guidelines
• Terms of Service
• Diversity and Inclusion Pledge
• Advertise
• Careers
• Contact
• EU Privacy

We Care About Your Privacy

We and our 100 partners store and/or access information on a device, such as unique IDs in cookies to process personal data. You may accept or manage your choices by clicking below, including your right to object where legitimate interest is used, or at any time in the privacy policy page. These choices will be signaled to our partners and will not affect browsing data.

We and our partners process data to provide:

Store and/or access information on a device. Use limited data to select advertising. Create profiles for personalised advertising. Use profiles to select personalised advertising. Create profiles to personalise content. Use profiles to select personalised content. Measure advertising performance. Measure content performance. Understand audiences through statistics or combinations of data from different sources. Develop and improve services. Use limited data to select content. List of Partners (vendors)