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Mobile AL - State of Alabama Income Tax Lien

Industry Observer with Stellar Accounting LLC

Taxpayers in Alabama are often surprised to learn that the Alabama Department of Revenue is generally more aggressive than the IRS when collecting tax debt.  While the IRS has adopted a Taxpayer Bill of Rights that includes the right to expect the tax system to consider the facts and circumstances that might affect a taxpayers ability to pay (i.e. uncollectible status), there is no similar relief available for taxes owed to the State of Alabama. 

So what can an Alabama taxpayer do if they find themselves owing taxes that they are unable to pay?  Your best alternative is to request a written payment agreement in order to prevent a garnishment or a levy of bank accounts.

While the State of Alabama has no formal Installment Agreement program, 40-2A-4(b) of the Code of Alabama authorizes the ADOR to enter into a written payment agreement when it will facilitate the collection of the tax liability and is in the best interest of the Department. The agreement is limited to a time frame not to exceed twelve months, and will have a balloon payment at the end if the taxpayer is unable pay the balance in full within the twelve month period. 

It should be noted that taxpayers have no rights to a payment agreement.  The ADOR has sole discretion in determining whether a payment agreement will be granted, and if granted a tax lien will be filed to protect the state's interest. 

Taxpayers should request an installment by filing form C:41/E after receiving a final assessment from the Collection Service Division.

If you or someone you know is having an Alabama Income Tax issue, please feel free to contact me at either 251-621-1474, or by email at info@stellaracctg.com.  We are conveniently located in Daphne, AL.


Starla Smith, CPA

Stellar Accounting LLC

811 Daphne Ave, Ste B

Daphne, AL 36526

Ph. (251) 621-1474





Comments (2)

Bruce Hicks
Best Homes Hawaii - Honolulu, HI
Your Best Hawaii Realtor!

So, Starla Smith CPA , does that mean one can look for tax lein properties and bid at the county or state?

May 19, 2019 10:41 AM
Starla Smith CPA
Stellar Accounting LLC - Daphne, AL
Your Professional Tax & Accounting Problem Solver

Hi Bruce, this article actually relates to income tax liens.  I've updated the title to clarify.  But to answer your question, property tax liens are handled at the county level in Alabama. My county holds an auction each May.

May 19, 2019 10:48 AM