Understanding the North Carolina Department of Revenue’s Notice of Assessment

Receiving a Notice of Assessment from the North Carolina Department of Revenue (NCDOR) can be a bit daunting but understanding its purpose and the steps you need to take can help ease the process.

What is a Notice of Assessment?

A Notice of Assessment is a formal notification sent to taxpayers by the NCDOR, indicating the proposed amount of tax owed. This notice is typically issued when:

• An error on your tax return increases the amount you owe or reduces the payments and credits, changing the return from a refund to a balance due.
• An audit adjustment by the Department results in additional tax due.

Why Did You Receive a Notice?

You may receive a Notice of Assessment for several reasons:

• Error Correction: If an error on your tax return increases the amount you owe or changes a refund to a balance due.
• Audit Adjustments: If an audit by the NCDOR results in additional tax due.
• Federal Adjustments: If the IRS notifies the NCDOR of changes to your federal return that affect your state tax liability.

What Should You Do Next?

Upon receiving a Notice of Assessment, you have a few options:

1. Agree with the Assessment: If you agree with the assessment, you must either send the full payment within 45 days from the date on the notice, or, agree to a payment schedule to avoid a collection fee. Payments can be made online, by phone, or by mailing a check or money order.
2. Disagree with the Assessment: If you disagree with the assessment, you can request a review by the NCDOR. This request must be made in writing within 45 days from the date the notice was mailed or delivered. You can use Form NC-242 or write a letter explaining why you disagree.

How to Pay Your Assessment

You have several options for paying your assessment:

• Online Payment: Use the NCDOR’s Bill and Notice Payment web application to pay by bank draft or credit/debit card.
• Phone Payment: Pay by credit/debit card or bank draft by calling the NCDOR at 1-877-252-3252.
• Mail Payment: Send a personal check or money order to the North Carolina Department of Revenue, Post Office Box 25000, Raleigh, North Carolina, 27640-0640. Include your name, social security number, type of tax, and tax year with your payment.

Important Deadlines

The NCDOR has three years from the due date of your return or the date you filed (whichever is later) to send a Notice of Assessment. If the IRS notifies the NCDOR of changes to your federal return, the Department has three years from the date of notification to assess additional state tax. If you file an amended return reporting changes made by the IRS within six months of being notified, the Department has only one year from the date you file the amended return or three years from the due date of your return or the date you filed, whichever is later, to send a notice of assessment.

The Benefits of Working with a Professional Tax Firm

Navigating a Notice of Assessment can be complex and overwhelming. That’s where professional tax firms like Murray Moyer come in. By working with experienced tax professionals, you can ensure that your response to the notice is accurate and timely. We can help you review your tax return, gather necessary documentation, and represent you in communications with the NCDOR. Our expertise can make a significant difference in reducing stress, minimizing errors, and achieving a favorable outcome.  Contact us today to schedule a consultation.