A month ago I received a debt collection letter about an alleged unpaid tax bill. I did not recognize the bill, and had definitely never heard of it before this, so I sent them a letter within a few days disputing the debt. I sent it certified and got the return receipt, so I know they received it, but they never responded. Yesterday I got another letter asking for the same debt, now with interest, and threatening to garnish my wages. I know they were legally required to respond to my original dispute, but I'm not sure what the next step is now that they haven't.
The first step of a non-governmental debt collector would be to sue you and obtain a money judgment (if this debt collector is legitimate, something the comments touch upon).
A tax debt is different, if this is a legitimate tax debt. There is usually an internal tax collection agency process that must be exhausted, resulting in an assessment of taxes which then results in a non-judicial imposition of a tax lien, upon which what is sometimes call a distaint warrant authorizing execution against assets pursuant to the tax lien is issued by a court in Oregon.
Outside Oregon, the Oregon money judgment or the distaint warrant would have to be domesticated into California as a foreign judgment, which is a basically administrative process that might be possible to do without notice to you (I'm not a California law expert on these fine matters of procedure).
Once there was a money judgment domesticated into California, your wages and bank accounts could be garnished, your property could be seized pursuant to writs, and liens in your personal and real property could be perfected and foreclosed upon.
Of course, if this outfit is a sham, with a fake debt, this is unlikely to happen, and they might give up, or you might sue them for violating debt collection laws or engaging in fraud, or a law enforcement agency might do that based upon your complaint.
It might take a civil action of some sort to set aside in invalid judgment, if it was invalid, but the process of setting aside an invalid foreign tax debt is very complicated even for an average small firm lawyer. Lack of notice of a lawsuit is generally a strong defense to a private sector debt, but is not always such a strong defense to certain kinds of tax debts (and the process for different kinds of tax debts is quite different).