The following information will provide an overview of the Collection Process for delinquent taxes to the state’s Unemployment Insurance (UI) Trust Fund, administered by the South Carolina Department of Employment and Workforce (DEW).
DEW is re-establishing collections efforts after a hiatus due to the COVID-19 pandemic.
How to Resolve Tax Debts Prior To Collection
It is important to resolve any outstanding debt you owe to DEW as soon as possible. Penalty and interest will be added to your debt and will continue to grow until the amount is paid in full. A taxpayer can end the collection process by making full payment of the assessed liability. For employers, you must login to SUITS tax system to view your full liability with interest.
If you do not pay your taxes, you may receive a NOTICE OF UNPAID UNEMPLOYMENT INSURANCE TAXES, and a FINAL DEMAND FOR PAYMENT AND NOTICE OF COLLECTION ACTION. This is your opportunity to resolve the debt prior to having the debt referred to collections, by either paying the amount due, appealing the assessment, or entering into an Installment Payment Agreement. Do not wait for the Collections team to contact you. You must immediately take action to resolve your debt to avoid collection enforcement action.
Actions DEW May Take
Under the authority of state statutory law, DEW may use a variety of actions to collect your past-due tax, penalty and interest and may take these actions at any time during the course of collection.
- Collections – Liens
Collections will file liens on Real and Personal property to protect the State's interest as a creditor. Liens may be filed even when a taxpayer has made payment arrangements and is current with all. Once a lien is filed, the taxpayer's credit rating could be harmed and, in most cases, property cannot be sold or transferred until the past-due tax is paid. A lien filed with DEW’s online Tax Registry becomes public record. Credit reporting agencies may obtain and publish the lien information.
- Tax Levies – Seizure of business and personal property
DEW has the authority to issue a Tax Levy to seize and sell your personal property (such as business vehicles, business assets, equipment and inventory). The money from the sale of the business assets will be applied to your tax debt. Notification will be provided to you before the property is seized. Most seized property cannot be sold by the Department for at least 10 days (perishable items may be sold within 24 hours). Seizure related will be charged to you.
- Offset Refunds
You (or your spouse's) income tax refund or credits may be offset and applied to your tax debt.
- Refer Your Account to a Credit Agency
Dew reserves the right to contract with a private collection agency, to help us collect the delinquent tax, penalty and interest owed to the State of South Carolina.
- Other Collection Methods
Your account may be referred as necessary for additional legal action.
PAYMENT RELATED QUESTIONS
- Why did the South Carolina Department of Employment and Workforce (DEW) take my income tax refund?
Your refund has been applied to a balance that is owed to South Carolina Unemployment Insurance (UI) Trust Fund.
- Why did I get this bill?
You received an assessment from DEW because it has been determined that you owe money to the UI Trust Fund. Your assessment includes an explanation of the debt owed. If you need additional information, please refer to the contact information included in the notice received from the agency.
- How can I pay?
The SUITS (Employer tax portal) system generates real-time calculations of taxable wages and UI taxes due. Login to your SUITS account and review your payment options.
MONIES APPLIED TO PAY YOUR DEBT (OFFSETS) RELATED QUESTIONS
- What is an offset?
An offset is when DEW intercepts your income tax refund through either federal or state income tax refund intercept programs, TOPS and SOD.
- Was my refund used to pay toward my debt?
If the agency engages the TOPS or SOD program, your refund has been applied to a balance that is owed to the state’s UI Trust Fund.
LIENS AND LEVY RELATED QUESTIONS
- What is a Notice of Tax Lien?
A Notice of Tax Lien is an instrument that gives DEW a legal right or interest in a debtor's property, lasting usually until a debt that it secures is satisfied. A Notice of Tax Lien may attach to real and/or personal property wherever located in South Carolina. A Notice of Tax Lien will be filed only after a tax liability has been assessed and we have sent you a bill for taxes. Once these requirements have been met, a tax lien will be filed with the DEW Tax Lien Registry in the amount of your tax debt. Upon receipt of full payment, the lien is satisfied. Click here to see the Tax Lien Registry.
- Why did you place a tax lien on my property?
A tax lien was placed on your property because you are liable for a delinquent tax debt. The lien is security for DEW, so that proceeds due you from a sale, of real or personal property, will be applied to the debt balance.
- What is the difference between a lien and a levy?
A lien is filed with the DEW Tax Lien Registry as a security that a debt will be paid from proceeds when a taxpayer sells real or personal property. A levy is a form of warrant that is generally used to withdraw funds from a taxpayer’s financial institution account. A levy may be used when a taxpayer has failed to resolve their debt through voluntary payment and the debt continues to escalate. A levy may also be used to seize a taxpayer’s real or personal property.