Types of New York State Tax Notices Explained: What Each Letter Means and What to Do Next

Few things raise stress faster than an official-looking envelope from the New York State Department of Taxation and Finance. Even if you run a solid business, keep decent records, and try to do things right, that letter can still make your stomach drop.

Here’s the good news. Most New York State tax notices are not disasters. They are messages. Some are simple questions. Some are reminders. Some are more serious, but even those usually come with options if you act early.

The real problem is not the letter itself. The problem is not understanding what kind of letter it is and what to do next.

This guide is here to fix that.

By the end of this article, you will know:

• How to quickly identify the type of New York State tax notice you received

• How serious each notice type is, from low risk to high risk

• What New York State is really asking for in each letter

• What to do next based on the exact notice you have in hand

• How notices can escalate if ignored

Everything below is written in plain language, so you can understand it even if taxes are not your thing.

How to Identify Your New York State Tax Notice Quickly

Before you do anything else, you need to identify the notice.

Look for the notice or form number

Every New York State tax notice has a form or notice number. It is usually printed:

• Near the top of the letter, or

• In the bottom left or right corner

Examples include DTF-948, AU-222, or AU-32. This number matters more than the title of the letter.

Find the tax year

The notice will always mention the tax year involved. This indicates which return or period New York is referring to.

Check the deadline

Most notices provide you with approximately 30 days to respond. The exact date is usually printed near the top of the letter. Missing this deadline can limit your options.

Read the “why”

Somewhere in the letter, New York explains why they contacted you. This might be short and vague, but it gives clues about what they want.

Confirm it is real

If you are unsure, you can log into New York State Online Services to see if the notice appears there. This also helps protect against scams.

Once you identify the notice type, everything else becomes easier.

New York State Tax Notice Risk Levels: How Serious Is Your Letter?

Not all New York State tax notices mean the same thing. Some letters are simple requests for information. Others mean the state believes you owe money. A few signals that collection action may start soon.

The key is to figure out how serious your notice is, because the risk level determines how fast you need to act and what options you still have. New York State tax notices generally fall into three risk levels: low, medium, and high.

Below is how to tell the difference and what each level means for you.

Low-Risk Notices: Verification and Filing Issues

Low-risk notices are the most common and usually the easiest to fix. These letters do not mean New York State is taking enforcement action. Most of the time, the state just needs more information or believes something is missing.

If you respond on time, these notices often go away without penalties.

Request for Information (DTF-948 or DTF-948-O)

This notice means New York State wants proof to confirm something on your tax return. They may be checking income, deductions, credits, or where you lived during the tax year.

Common reasons this notice is sent include:

• Missing documents

• Numbers that do not match IRS data

• Claims that need extra proof, like business expenses or residency

What to do next:

• Read exactly what documents are requested

• Send copies, not originals

• Respond by the deadline, usually 30 days

If you respond fully and on time, your return is processed as normal. If you ignore it, the state may adjust your return in its favor.

Reminder to File (AU-222)

This notice means New York State believes you should have filed a tax return, but they have no record of receiving one.

This can happen if:

• You missed a filing deadline

• A business return was not submitted

• The state received income information tied to your name or business

What to do next:

• File the missing return right away, even if you cannot pay

• If you already filed, provide proof

• Do not assume this notice will fix itself

Ignoring this notice can lead to New York State estimating your tax bill, which is usually higher than what you really owe.

Medium-Risk Notices: Proposed Changes and Amounts Due

Medium-risk notices mean New York State believes there is a tax issue that affects how much you owe. Money is involved, but you still have time and options if you act quickly.

Deadlines matter more at this stage.

Notice of Tax Due or Bill

This notice says New York State believes you owe additional tax, interest, or penalties. This can happen due to:

• Corrections made to your return

• Late payments

• Prior balances that were not fully paid

What to do next:

• Review the numbers carefully

• Compare them to your return and records

• Pay if you agree, or respond if you do not

If you cannot pay in full, New York State may allow a payment plan. Ignoring the bill will cause interest and penalties to grow.

Proposed Assessment or Audit-Related Notice

This notice means the state reviewed your return and proposes changes that increase your tax. This is common for businesses, self-employed individuals, and people with complex income.

What to know:

• This is not always final

• You usually have appeal rights

• There is a strict deadline to respond or protest

If you miss the response window, the proposed amount may become final, even if it is wrong.

High-Risk Notices: Enforcement and Collection Actions

High-risk notices mean New York State is preparing to collect the debt. These letters require immediate attention. Waiting can limit your options very quickly.

Final Assessment Notice

A final assessment means New York State has finished reviewing your case and locked in the amount owed.

At this stage:

• Appeal rights are limited or gone

• Interest continues to build

• Collection action may start soon

If you receive this notice, time is critical.

Collection or Demand for Payment Notice

This notice means New York State is actively moving to collect unpaid taxes.

Possible actions include:

• Bank account levies

• Wage garnishment

• Tax warrants, which become public records

• Liens on business or personal property

What to do next:

• Do not ignore this notice

• Contact the department or a tax professional right away

• Ask about payment plans or resolution options

The earlier you act, the more control you keep.

Business-Specific New York State Tax Notices

Businesses face extra risk because they handle taxes for others.

Sales tax notices

These often involve:

• Missing filings

• Underreported sales

• Resale certificate issues

Sales tax errors escalate quickly because the state treats this money as held in trust.

Payroll and withholding tax notices

These involve:

• Employee withholdings

• Late deposits

• Filing errors

New York takes these notices very seriously because the money belongs to employees.

Why business notices escalate faster

Businesses often face:

• Larger dollar amounts

• Shorter deadlines

• Higher penalties

Responding quickly protects cash flow and operations.

What to Do Next Based on Your Notice Type

Here is a simple decision guide.

• Request for information: Respond with documents

• Reminder to file: File or prove filing

• Bill you agree with: Pay or set up a plan

• Bill you disagree with: Respond and dispute

• Audit or assessment: Review carefully and consider help

• Collection notice: Act immediately

Waiting rarely improves the situation.

Common Mistakes to Avoid When Responding to NYS Tax Notices

Even smart business owners make these mistakes.

Ignoring the notice

This is the fastest way to lose options.

Missing deadlines

Deadlines protect your rights. Missing them weakens your position.

Sending incomplete documents

Partial responses often lead to follow-up notices or denials.

Paying without reviewing

Once paid, correcting errors can be harder.

Assuming it will fix itself

It rarely does.

Final Thoughts: Identify the Letter, Then Act

New York State tax notices are not all created equal. Some ask questions. Some ask for money. Some signal enforcement.

The key is knowing which one you have.

Once you identify the notice type and risk level, the next step becomes clear. Respond, review, pay, dispute, or get help. The worst choice is doing nothing.

Handled early, most New York State tax notices are manageable. Handled late, even small issues can grow fast.

Read the letter. Know what it means. Then take action while your options are still open.

Understanding your tax notice is the first step. Knowing how to respond correctly is just as important. For a full walkthrough of timelines, payment plans, appeals, and when to get help, see our complete guide on what happens if you get a tax notice from New York State.

Frequently Asked Questions

How long do I have to respond to a New York State tax notice?

Most notices give about 30 days, but always check the letter.

Is every New York State tax notice an audit?

No. Many are simple requests or reminders.

Can I respond online if I received a paper letter?

Yes. Many notices allow online responses through NY Online Services.

Should businesses respond differently from individuals?

Often, yes. Business notices can escalate faster and involve higher penalties.

What if I lost the notice?

You can usually find it in your New York State Online Services account or request a copy.