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Colorado Nonfiler Notification Letters

  • Sep 3, 2013 | Gail Cole

 Is there a Colorado Nonfiler Notification letter in your mailbox?

Are you the lucky recipient of a Department of Revenue Nonfiler Notification letter? If so, it's time to take action. Whatever you do, don't toss it on that long-neglected pile of paperwork in the corner of your office, where it will gather dust. Penalties and interest could also gather there. And worse.

The Colorado DOR has mailed Nonfiler Notification letters to any business that failed to file a return for a specific period of time ("the period noted on the upper right side of the letter"). All businesses are required to file returns even when no sales tax is due--that's how the department is aware no sales tax is due. If no return is filed, the department assumes that tax is due and hasn't been paid. That's never a good scenario.

After sending out the Nonfiler Notification letter, the department estimates the amount of tax due and sends out a bill. Should that bill go ignored (and unpaid), businesses are sent a Warrant of Distraint, "which gives the Department of Revenue the authority to seize your business and sell assets to satisfy" the tax debt.

In a word, "Yikes."

What to do?

If you find yourself in this position, the best course of action is to immediately file a return for the period indicated and pay whatever the Colorado Department of Revenue says you owe. If you had no sales during that period, file a zero sales tax return. If the business or location was closed during that period, write the date of closure on the notification letter and keep a record for your files.

Peace of mind

Having a department of revenue threaten to seize your assets is disturbing. An automated sales tax solution provides peace of mind.

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.