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Indiana sales tax notices

Got a letter from the Indiana Department of Revenue (DOR)? Find it below to see what it means, why businesses usually receive it, and what to do next.

Sources checked

Tax authority

Indiana Department of Revenue (DOR) (opens in a new tab)

Official notice guide (opens in a new tab)

Disagree with a notice?

Challenge a Notice of Proposed Assessment by sending DOR a written protest that explains your reasons, with the Protest Submission Form (State Form 56317) and supporting documents. You have a statutory right to a hearing. After a final determination, you can request a rehearing within 30 days or appeal to the Indiana Tax Court.

Deadline: 60 days from the date of the proposed assessment. The deadline is statutory and cannot be extended.

Source: Indiana Department of Revenue (DOR) (opens in a new tab)

Balance due

A bill for tax, penalty, or interest the authority says is unpaid.

Balance due

Demand for Payment

A bill sent when there was no payment or response after a Notice of Proposed Assessment, or after a protest was denied. If it is not paid, DOR issues a tax warrant.

Why you got it

  • A NOPA was not paid or protested
  • A protest of a proposed assessment was denied in whole or in part

What to do

  1. If you believe the bill is wrong, upload supporting documents in INTIME with the Letter ID
  2. Pay the tax on INTIME, by check with the payment voucher, or at a district office, or set up a payment plan in INTIME, within 20 days to avoid a tax warrant
  3. If penalties are included and you had reasonable cause, submit a penalty abatement request in INTIME or on Form 53054

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: 20 days to respond

Source: Understanding a Demand for Payment Letter (opens in a new tab)

Assessment

A proposed or final determination of tax owed, sometimes estimated when returns were never filed.

Assessment

Notice of Proposed Assessment (NOPA)

A bill proposing tax, penalty, and interest that DOR believes you owe. It is sent for unpaid balances, estimated bills for missing returns, return adjustments, and audit results.

Why you got it

  • Tax on a filed return was not paid by the due date
  • A return was not filed, so DOR estimated the bill
  • DOR adjusted a return or an audit found tax due

What to do

  1. Check the NOPA against your records. If you already filed or paid, upload the return or proof of payment in INTIME under 'Respond to a letter, notice or bill'
  2. If the bill is an estimate for a return you never filed, file the actual return
  3. Pay the tax on INTIME or set up a payment plan. If you had reasonable cause, submit a penalty abatement request in INTIME or on Form 53054 rather than simply paying the penalty
  4. If you disagree with the assessment, file a written protest within 60 days of the letter date. If you do nothing, DOR will demand payment and you lose the right to protest

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Response window: 60 days from the date the letter was issued to protest in writing

Source: Understanding a Notice of Proposed Assessment letter (opens in a new tab)

Audit

A request for records or notice that the authority is examining your returns.

Audit

Audit initial contact letter

A letter from the assigned auditor giving the tax types and periods to be audited, the auditor's and supervisor's contact information, and next steps. The audit ends with an audit summary report and a NOPA for each year with tax due.

Why you got it

  • Your business was selected for a sales and use tax audit

What to do

  1. Expect a call or email from the auditor listed in the letter to schedule the audit, and contact the auditor with any questions
  2. Gather the requested records, such as sales records and exemption certificates, and consider getting a tax professional involved
  3. Review the audit summary report and any NOPA. If you disagree, including with a negligence penalty you had reasonable cause for, protest within 60 days

Source: Indiana Department of Revenue Audit Manual (opens in a new tab)

AuditAD-14

Notice of Non-Compliance

Issued during a sales tax audit when you cannot show an exemption certificate for a sale you reported as exempt. It gives you extra days to get the documentation and comes with a special exemption certificate (Form AD-70) for your customers to complete.

Why you got it

  • Missing or incomplete exemption certificates for exempt sales found during audit fieldwork

What to do

  1. Send Form AD-70 to the affected customers and get it back completed and signed
  2. Return completed certificates or other proof of exemption to the auditor within the period stated on the notice
  3. Anything not documented in time may be assessed as taxable

Response window: The number of additional days is stated on the notice

Source: Indiana Department of Revenue Audit Manual (opens in a new tab)

Registration

Changes to your permit or account: required registration, filing-frequency changes, revocation, or closure.

Registration

Registered Retail Merchant Certificate (RRMC) expiration/revocation notice

If a retail merchant has unpaid sales tax or missing returns, DOR sends notices 30 and 60 days before the RRMC expires. A certificate that expires or is revoked is published on DOR's delinquent merchant list, and you cannot legally make retail sales without it.

Why you got it

  • Unpaid sales tax bills
  • Unfiled sales tax returns
  • Not paying the tax or setting up a payment plan

What to do

  1. File all missing sales tax returns
  2. Pay the delinquent sales tax in full, or set up a payment plan and make the down payment
  3. Pay the $25 reinstatement fee for each Indiana location. After a revocation, there is a 7-day wait before the certificate is reissued
  4. If you had reasonable cause for the late filings, submit a penalty abatement request in INTIME. Questions go to Payment Services at paymentservices@dor.in.gov

Response window: Notices are sent 30 and 60 days before the RRMC expires

Source: DOR: Delinquent Registered Merchant FAQ (opens in a new tab)

Collections

Enforcement on unpaid balances, such as liens, levies, warrants, or referral to a collection agency.

Collections

Tax Warrant for Collection of Tax

Issued when a Demand for Payment goes unpaid. It is not an arrest warrant, but it becomes a statewide lien on your property, shows up on credit reports and title searches, and can be collected by the sheriff or a collection agency.

Why you got it

  • A Demand for Payment was not paid or resolved

What to do

  1. Pay the total amount due, including warrant costs, or contact DOR about a payment plan
  2. Work with the sheriff or DOR's collection agency (United Collection Bureau) if the warrant was referred to them
  3. For liens on vehicle titles, contact the Compliance Check Unit at 317-232-5977

Before you pay penalties: check whether you can ask for them to be waived, and what the state needs paid first. How to ask

Source: DOR: Collection Stages (opens in a new tab)

Ask for penalty relief

Penalties on a Indiana notice aren't always final. You can ask for them to be waived. Follow the steps below, including anything the state requires you to file or pay before it reviews the request.

Penalty abatement request

State Form 53054 (PEN-1), Penalty Abatement Request
  1. If you can, file any missing returns and pay the tax, or set up a payment plan. You can request abatement before or after paying
  2. In INTIME, go to All Actions, then 'Legal protests and abatements', then 'Submit penalty abatement request'. Or mail Form 53054 to the address for your tax type
  3. Use one request per tax account and period, explain the facts showing reasonable cause, and attach all supporting documents

What qualifies: Reasonable cause: you exercised ordinary business care and prudence (45 IAC 15-11-2)

Interest: Interest can't be waived. Indiana law requires interest on late tax payments

Source: DOR: Request a Penalty Abatement (opens in a new tab)

Before you respond

  • Check the date on the notice. Response windows usually run from that date, not the day you open it.
  • Match the account number and filing period to your own records before paying or disputing.
  • If returns are missing, filing the actual returns usually replaces an estimated bill. Confirm how on the notice or with the authority.
  • Ask about penalty relief before paying penalties, and check what must be paid with the request. See how
  • Keep a copy of the notice and everything you send back.

This page is general information, not tax or legal advice. Notice names and procedures change, so always follow the instructions on your notice and the official sources linked above.

Need the rates, nexus thresholds and filing rules? Read the Indiana sales tax guide.

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