Overview of Illinois Tax Relief or Resolution Options

The Illinois Department of Revenue (the “DOR”) has the job of collecting all the state’s taxes. It includes the income tax as well. Once taxes become due either because of an audit assessment or due to the taxpayer filing a tax return without paying any tax due, the DOR will send a collection notice to the taxpayer. If the taxpayer does not respond to the letter by the due date, the DOR will begin enforced collection activities. These actions may include a tax lien placed on assets, a bank account levy, or wage garnishment. It can also include the seizure of personal property and revocation or suspension of business licenses, and the utilization of collection agencies.  Therefore, it is essential for taxpayers with taxes owed to proactively resolve their outstanding tax liabilities.

Standard Income Tax Relief Options

Taxpayers who owe delinquent income taxes to the State of Illinois have four standard options available to reach a reasonable resolution. These are:

• Installment Payment Plan – An Installment Payment Plan is a monthly tax payment plan. In other words, an arrangement where the taxpayer reaches an agreement with the DOR to make a series of monthly payments until the taxpayer pays their taxes in full (including penalties and interest).
• Offer-in-Compromise (OIC) – An OIC is an agreement where the taxpayer agrees to settle their taxes owed by paying a lump sum in settlement of the entire tax owed. In other words, the taxpayer pays less than they owe.
• Penalty Abatement – It is a request by the taxpayer asking the DOR to reduce or eliminate tax penalties assessed.
• Innocent Spouse Relief -A request by a taxpayer who filed jointly with their former spouse or current spouse and believes their spouse has the sole responsibility for paying the tax liability.

You can find more information about each option discussed by following their respective links above. However, taxpayers can find innocent spouse relief details and other options below.

Innocent Spouse Relief

Illinois offers Relief from Joint Liability for taxpayers who filed joint returns but should not be held liable for their spouse’s delinquent taxes. Generally, spouses who file a joint return for a tax year are each responsible for paying the entire joint tax liability no matter who generated the income. One exception to this rule is achieved through one spouse requesting Innocent Spouse Relief (ISR). With ISR, one spouse may avoid paying the joint liability when the other spouse is responsible for failing to pay the tax shown due on a joint income tax return or for failing to report all taxes due.

Taxpayers can apply for Innocent Spouse Relief if:

• the taxpayer filed a joint return with their spouse for a tax year,
• at the time the taxpayer signed the joint tax return, they did not know their spouse “omitted income, claimed false deductions or credits, or otherwise prepared a fraudulent return; and”
• the taxpayer believes “the sole responsibility for paying the tax liability belongs to their spouse”

Documents Need for Innocent Spouse Relief Request

To request Innocent Spouse Relief taxpayers must complete Form IL-8857, Request for Innocent Spouse Relief. Taxpayers must complete it for each year in which the taxpayer requests relief. The taxpayers must attach the following to their request:

• A copy of original U.S. and Illinois income tax returns
• A copy of any amended U.S. and Illinois income tax returns
• Any final determination of the taxpayer’s federal or Illinois tax liability that was received. This includes any grant or denial of innocent spouse relief, and
• Any other supporting documentation that would assist in determining eligibility
• A copy of U.S. Form 8857, Request for Innocent Spouse Relief, if the taxpayer also requested relief from the IRS

The taxpayer seeking ISR has the burden of proof in establishing that they are not liable for the taxes owed. Once the DOR has received the Innocent Spouse Relief request, they will send a notice to the other spouse listed on the joint return for the tax years at issue. The notice will state that a taxpayer filed a request for innocent spouse relief. At this point, the other spouse has 60 days from the date of the notification to submit documentation or additional information that may assist the DOR in coming to a determination. It is important to note that while the other spouse has the opportunity to submit documentation, they will not be allowed to otherwise participate in the proceedings.

Once the DOR Decides

Once the DOR has made a determination, they will send a notice to both spouses stating the effects of the proceedings on each spouse’s joint return liability. An innocent spouse may have a claim for refund for any overpayment that resulted from the granting of innocent spouse relief. There is no limitation period for making an “innocent spouse” election. However, the DOR will not issue a refund of taxes paid by a spouse making the election unless the taxpayer files the election within the applicable period for filing a claim for refund of income taxes.

If the taxpayer has already received Innocent Spouse Relief from the IRS, the validity of the innocent spouse request is conclusively presumed to be correct.

Taxpayers should mail the completed form IL-8857, along with supporting documentation to:

Illinois Department of Revenue
Problems Resolution Division
PO Box 19014, Springfield, IL 62794.

Statute of Limitations

Taxpayers should understand their legal rights concerning Illinois law regarding the statute of limitation rules for the collection of unpaid taxes. In Illinois, the general collection statute of limitation is 20 years from the date of assessment. However, the 20 years may be reduced if one of the following applies:

• The DOR filed a tax lien
• The Attorney General entered a judgment
• Certain other enforcement actions were used

Other Options That May Be Available

Challenge the Assessment

Taxpayers can appeal a proposed assessment to the Independent Tax Tribunal if they have a proposed assessment for additional income taxes owed from the result of a State audit and the amount of tax is $15,000 or higher. The taxpayer can file the petition online here. If the taxpayer does not come to a resolution with the Independent Tax Tribunal, the taxpayer can appeal to the Illinois Circuit Court.

Bankruptcy

Taxpayers may want to consider bankruptcy if they have notable personal liability in addition to taxes owed. Bankruptcy is usually expensive. Furthermore, it can lead to taxpayers still owing taxes after the bankruptcy comes to a close. In other words, the taxpayer may not eliminate some taxes through bankruptcy proceedings. Therefore, taxpayers who owe want to consider it should reach out to an experienced bankruptcy attorney.

The Illinois Tax Amnesty Program

Illinois has a history of offering tax amnesties. The last tax amnesty program offered by the State took place in 2010. A Tax Amnesty Program offers taxpayers a way to reduce or eliminate some or all penalties and interest in exchange for getting into filing and payment compliance. Currently, Illinois does not have one of these programs open. However, delinquent taxpayers should be aware that these types of programs exist and check to see if the state currently has one active.

Appeal Rights

As discussed herein, the DOR has a Board of Appeals that was established as a unit within the DOR to be responsible for the review of Penalty Abatement requests and Offer-in-Compromise requests. The decisions of BOA cannot be appealed. Therefore, they are final, leaving requesting taxpayers with denials very few options.

Alternatively, as a practical tip, the taxpayer should not hesitate to raise controversial issues to a DOR supervisor. Often, a new representative and the authority and experience of a supervisor can help resolve tax issues.

Lien Releases

The DOR will only release a tax lien after:

• they have received confirmation that the past due liability has been paid in full or
• satisfied via an approved Offer-in-Compromise payment.

Conclusion

Given the information contained herein, taxpayers have many different options to resolve unpaid taxes with the State of Illinois. With that said, Illinois has up to 20 years to collect past due liabilities. It has much longer than most other states and the federal government to collect. Additionally, taxes owed can become quite large quickly because of associated penalties, interest, and collection fees. Therefore, taxpayers should contact a licensed tax professional or tax resolution firm to determine which option(s) to pursue. To connect to a tax professional with Illinois DOR experience, visit this link today, or start your search below.

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific help regarding your tax situation, contact a licensed tax professional or tax attorney.

A Review of Illinois State Offer In Compromise

The land of Lincoln, or the State of Illinois, does have an Offer in Compromise (OIC) program. The Offer in Compromise program allows IL taxpayers to negotiate a lump sum settlement of their delinquent income taxes. In other words, an OIC “is defined as a proposal by the taxpayer to pay a sum certain in full satisfaction to taxpayer’s unpaid amount of tax (including penalty and interest).” It is one way for taxpayers to pay less than they owe in taxes. However, taxpayers need to qualify.  The taxpayer follows a process similar to requesting penalty abatement.

The Offer In Compromise Process

For a taxpayer to request an Offer in Compromise, they must file a petition with the Board of Appeals (BOA). Specifically, the BOA is an administrative tribunal that is within the Illinois Department of Revenue (DOR). Moreover, three members make up the BOA, who are appointed by the director of the DOR. It has the authority in conjunction with the DOR Director to:

(1) waive penalties and interest based on reasonable cause, and
(2) reduce tax liability if it is likely the full tax amount cannot be collected (Offer in Compromise).

Taxpayers may request to have an oral hearing. However, the BOA does not require it. A hearing officer or board member conducts oral hearings of the BOA. The hearing provides the taxpayer with an opportunity to provide additional information and to explain the reasons why the BOA should grant the Offer in Compromise.

Tax Forms to Complete

To petition the BOA for relief under their Offer in Compromise powers, the taxpayer must fill out Form BOA-1 Board of Appeals Petition. In fact, the form is the standard petition form used for both penalty abatement requests and Offer in Compromise requests. The only requirement that the DOR provides to be eligible to file the form requesting an Offer in Compromise is that taxpayer file all tax returns.

Documentation

When using the form to make an Offer in Compromise request, the taxpayer must attach the following documents:

• The last three federal income tax returns and all schedules
• The previous three state income tax returns and schedules
• Bank statements and brokerage statements from all the taxpayer’s financial institutions summarizing the last six months’ activities;
• The two most recent paycheck stubs or current financial statements (if self-employed); and
• A completed Form BOA-4, Financial Information for Individuals or a completed Form BOA-5, Financial Information for Businesses (if self-employed)

Taxpayers should fax their completed Forms BOA-1 and BOA 4 or 5 to 312-814-3055. Alternatively, they can mail the forms to:

Illinois Department of Revenue
Board of Appeals
James R Thompson Center
Suite 7-356, 100 W Randolph Street, Chicago, IL 60601-3274.

Grounds for Relief & Considerations

Uncertainty as to collectibility is the only reason or grounds for relief that the Illinois BOA will consider. In other words, taxpayers can request a compromise of their liability due to reasons of financial hardship. The BOA examines the taxpayer’s financial situation and considers the following:

• taxpayer’s financial situation
• likelihood of future earnings
• probability of the DOR collecting the amount due

The DOR does not provide further guidance as to specific calculations or other considerations that taxpayers should follow.

After the Taxpayer Files the Petition

After the taxpayer files the petition, the BOA will ask certain DOR employees to provide information and a recommendation about the taxpayer’s request. Afterward, the BOA will review the case and hold the hearing, if the taxpayer requests one. Most importantly, for the DOR to grant the taxpayer the Offer in Compromise, two of the three BOA members must agree. In other words, the BOA will deny the petition if a majority of the members are not in agreement. If the BOA agrees, they give their recommendation to the Director of the DOR for final approval. If the Director signs off, then the BOA will issue an order granting relief. Taxpayers cannot appeal decisions made by the BOA.

Leverage the Expertise of a Tax Professional

Many taxpayers across the U.S. face tax problems with unpaid or unfiled taxes. If a taxpayer has a financial hardship and owes Illinois income taxes, they may want to consider an Offer In Compromise, installment payment agreement among other options. Furthermore, many taxpayers may find the OIC required documentation and forms cumbersome and challenging. Therefore, taxpayers first should find out if they are eligible and their potential tax options. Taxpayers should find a licensed tax professional with Illinois tax experience by clicking the link or by starting the search below.

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific help regarding your tax situation, contact a licensed tax professional or tax attorney.

Review of Illinois State Tax Installment Payment Plan

In similarity to the IRS, taxpayers who cannot pay off their tax balance in one payment may look to set up a tax payment plan with the State of Illinois Department of Revenue (DOR). Illinois refers to installment agreements or tax payment plans as “Installment Payment Plans.” An Installment Payment Plan is an arrangement where the taxpayer comes to an agreement with the Illinois Department of Revenue (DOR) to make monthly scheduled payments until the taxpayer pays off their taxes.

The DOR will accept Installment Payment Plans from taxpayers who have delinquent tax liabilities and cannot pay in full. Generally, taxpayers who cannot pay in full have a financial hardship situation that prevents them from paying off their balance.

Ease of Payment Plan Dependent On Taxes Owed

Usually, Installment Payment Plans will be automatically accepted if the total delinquent taxes is $5,000 or less. If the taxpayer owes more than $5,000, they will have to submit financial information detailing their assets, liabilities, and current and future income potential.

The taxpayer’s financial situation will be used to determine the proper monthly payment figure. Usually, the DOR will expect the taxpayer to pay off the delinquent taxes within 12 months, but the state may give a longer duration (up to 24 months) with financial justification. However, exceptions may happen for certain financial circumstances with a manager’s approval. Before applying for an Installment Payment Plan, the taxpayer must be current with all tax return filings through the current date.

How To Apply for An IL Installment Payment Plan

Taxpayers can find the CPP-1, Installment Payment Plan Request form here for applying for an Installment Payment Plan. As a practical tip, taxpayers should offer a large down payment with their request if possible. Individual taxpayers who need to submit financial information with their Installment Payment Plan request need to fill out form EG-13-I the Financial and Other Information Statement for Individuals.  Businesses need to fill out form EG-13-B or the Financial and Other Information Statement for Businesses. Taxpayers should fax the forms to 217-785-2635 or mail the forms to:

Installment Contract Unit
Illinois Department of Revenue
PO Box 19035
Springfield, Illinois 62794-9035

The DOR provides minimal information regarding how they determine if taxpayers qualify for an Installment Payment Plan. After the taxpayer has submitted their Installment Payment Plan request, the DOR will conduct a review. If they determine that the taxpayer qualifies for an Installment Payment Plan, they will mail an approval letter to the taxpayer which outlines the conditions of the plan. Usually, the DOR will require the taxpayer to make payments via automatic withdrawal (ACH) from a taxpayer’s savings or checking account. If the DOR determines you can pay off your entire tax balance, they will require the taxpayer to do so and deny their payment plan request.

How Taxpayers Can Make Their First Payment or Extra Payments

If the IL DOR approves a taxpayer for an installment payment plan, they can make their first payment or extra payments in a variety of ways using:

• MyTax Illinois – Taxpayers can find this at mytax.illinois.gov and can use the system to make electronic payments
• “Pay By Phone” – Taxpayers can call 1-866-490-2061. They will need their taxpayer ID, the routing number for their bank, and their bank account number.
• Mail – Taxpayers can make a payment by mailing their tax payment to the address listed above.
• Credit Card – Taxpayers can only use this payment method for individual income taxes owed. Although taxpayers can make payments by credit card, credit card service providers will charge a convenience fee. To make a payment using this method, taxpayers can visit “MyTax Illinois” webpage. Alternatively, they can also call 1-866-490-2061 and select the credit card option. Therefore, taxpayers can avoid extra fees by submitting a payment without a credit card.

Other Details Taxpayers Should Know

With an IL tax installment payment plan, interest, penalties, and fees continue to accrue. Therefore, the faster taxpayers pay off their tax liability with the state, the less interest and penalties will accrue. Moreover, the DOR can file a tax lien at any time. Generally, the IL DOR will do so if it feels you may not honor your end of the agreement. If a taxpayer cannot afford the monthly payments with an Installment Payment Plan, they should look to apply for an Offer In Compromise.

Working With a Tax Professional

When in doubt, taxpayers should reach out to a tax professional that can handle Illinois state tax issues. Before hiring anyone, taxpayers should request a free consultation to understand possible tax options and associated fees. You can also start your search below of top-rated tax professionals that help with your particular agency you have issues with.

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific help regarding your tax situation, contact a licensed tax professional.

Overview of IL Tax-Related Penalties and Penalty Abatement

The Illinois Department of Revenue (DOR) assesses tax penalties to taxpayers who fail to file or pay tax liabilities. In this article, we will discuss two common tax penalties associated with delinquent taxpayers. There are two tax penalties taxpayers should know about along with how interest accrues on any unpaid balance.

Late-Filing (or Nonfiling) Penalty

The DOR will assess a penalty to individual taxpayers who do not file on time or fail to file. The IL DOR refers to this penalty as the Late-filing (or Nonfiling) Penalty. If a taxpayer timely files a tax return but DOR cannot process it and the taxpayer does not correct it within 30 days (for tax returns due after December 31st, 1995) from the date the state notifies them, taxpayers can also face a late-filing penalty.

The DOR assesses the tax penalty when the taxpayer fails to file by the due date, including extensions. Specifically, the tax penalty is the smaller of $250 or 2% of the tax required to be shown due on the return and lowered by timely payments or credits. The former applies to tax returns due January 1st, 2005 to current. If the taxpayer does not file a return “within 30 days after receiving a notice of nonfiling” the DOR will assess an “additional penalty equal to the greater of $250 or 2% of the tax shown due on the return without regard to timely payments.” The additional penalty will not exceed $5,000. The DOR will assess the tax penalty even if the taxpayer has no balance.

Late-Payment Penalty

If a taxpayer fails to pay taxes owed on time, the IL DOR will assess a Late-Payment Penalty. The DOR will assess this penalty if the taxpayer does not pay their taxes by the due date of the tax payment or the original due date of the return without regard to extensions.  The DOR bases the penalty on the number of days the tax required to be shown due on the return is late. If the payment is 30 days late or less, the penalty is 2%. If the payment is greater than 30 days late, then the tax penalty is 10%.

The penalty is 15% on any amount the taxpayer doesn’t pay after the “initiation of an audit or investigation” of the taxpayer’s liability. It is 20% of any amount the taxpayer does not pay within “30 days after the issuance of an audit-prepared amended return or Form IL-870, Waiver of Restrictions at the conclusion of the audit or investigation.”

If the taxpayer incurs a penalty for underpayment of estimated taxes or accelerated tax, the “tax amount that this penalty is assessed on is subtracted from the total tax.”

Interest

Taxpayers who fail to pay state taxes owed to the State of Illinois will incur interest charges. The DOR assesses interest the day after the taxpayer’s payment due date until the date the taxpayer pays the tax.  Interest is simple interest using a daily rate that the state updates twice a year (1/1 and 7/1). The state beginning January 1st, 2014, uses the federal underpayment rate. Before the previous date, the IL DOR assessed interest differently. Moreover, after January 1st, 2001, the DOR no longer charges interest on penalties. The current interest rate or “underpayment rate” for the period for which delinquent tax goes unpaid accrues at a rate of 6% (6/30/2019).

As one can see, the tax penalties and interest can add up. Therefore, even if a taxpayer cannot pay the taxes owed, they should still file. Filing a tax return and make a partial payment will lessen the impact of penalties.

Penalty Abatement

Illinois allows taxpayers to appeal penalty assessments by filing a petition to the Board of Appeals (BOA). Taxpayers can find the petition form for filing a penalty appeal request with the Board here. Taxpayers can petition the BOA once their liability has become final. In other words, “all administrative hearings, Tax Tribunal decisions, and court proceedings to review the assessment have ended or the time for taking such action has expired.”

The BOA will only consider penalty abatement for reasonable cause. IL makes determinations of reasonable cause on a case-by-case basis.

Examples Provided of Reasonable Cause

The DOR provides examples of reasonable cause for purposes of abating tax penalties:

• “If a liability results from amendments made by the DOR to regulations or formal administrative policies or positions after which the liability was computed was filed.”
• Reasonable cause may exist based on severe illness of the taxpayer (or the tax preparer), incapacity, or death. It may also exist if a death or serious illness to an immediate family member caused a late filing or payment. “In the case of an estate, trust, or corporation, the death, incapacity, or serious illness happened to the individual with sole authority to file the return (not the individual preparing the return) or make the deposit/payment, or a member of such individual’s immediate family.”
• “An unavoidable absence of a taxpayer (or tax preparer) due to circumstances unforeseeable by a reasonable person may also constitute reasonable cause for
  purposes of abatement of the penalty.” With an estate, corporation, or trust, etc., “the absence is due to the individual having sole authority to file the return (not individual preparing it) or make the deposit/payment.”

More Examples of Reasonable Cause

• The taxpayer was unable to obtain records necessary in a timely fashion for reasons beyond the control of the taxpayer.
• Factors beyond the taxpayer’s control. For example, “destruction by fire, other casualty or civil disturbance, of the taxpayer residence or place of business records.”
• “Taxpayer mailed the return or payment to the Department in time to reach the Department on or before the due date, given the normal handling of the mail. However, through no fault of the taxpayer, the return or payment was not delivered within the prescribed time period. This fact situation would constitute reasonable cause for abatement of the penalty.”
• If the taxpayer makes honest mistakes. For example, such as mailing a check to the wrong tax agency.
• An Illinois appellate court decision, a U.S. appellate court decision, or an appellate court decision from another state (provided that the appellate court case in the other state is based upon substantially similar statutory or regulatory law) which supports the taxpayer’s position will ordinarily provide a basis for a reasonable cause determination.
• The IL DOR provided erroneous information or it delayed a process under its control.
• “Taxes withheld by an employer for the wrong state.”
• “Embezzlement or employee fraud not reasonably within the knowledge of the taxpayer.”

Relevant Factors the BOA Considers With Penalty Abatement

The DOR provides that the BOA should consider the following pertinent factors of determining the existence of reasonable cause:

• “Could the taxpayer’s federal filing status have caused confusion about his or her Illinois filing requirements?” Under Illinois law, many taxpayers without an IRS filing requirement may need to file with the DOR.
• “Does the taxpayer’s reason address the penalty assessed?” For example, say DOR assessed the taxpayer a late payment and late filing penalty for the same return. “The taxpayer’s explanation of the failure to file and pay may apply to one penalty, but not the other.”
• “Does the length of time between the reason cited and the actual violation support abatement? If the taxpayer cites a specific event or set of events (e.g., illness, unexpected absence, or natural disaster) or set of events that led to the imposition of the penalty, the Department will determine whether those events are directly related to the return or payment under review.”
• Could the taxpayer have reasonably anticipated the event cited? Was the event one the taxpayer should have anticipated? For example, a vacation or scheduled absence. “[O]r was it unexpected, unavoidable, or otherwise unplanned (e.g., an emergency or disaster).”
• Did the taxpayer exercise prudence and ordinary business care?  “In the absence of new or unusual circumstances, most filing and payment requirements are common knowledge or are readily available to most taxpayers. If the taxpayer did all that could be reasonably expected of him or her and was still unable to file or pay on time, reasonable cause may be present.”

The procedures and filing information for submitting a petition with the BOA seeking penalty abatement relief, work in the same manner as those for an Offer-in-Compromise.

Request Tax Help

When in doubt, reach out to a licensed professional with experience in working with Illinois state to understand options with this link or start your search below.

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. Therefore, for specific help regarding your tax situation, contact a licensed tax professional or tax attorney.

Details Regarding Georgia’s Offer In Compromise Program

The State of Georgia offers a formal Offer-in-Compromise (OIC) Program whereby taxpayers can settle for less than they owe. The settlement will include the tax owed but also penalties and interest. The DOR administers the program and has specific submission requirements that a taxpayer must meet to qualify. The Georgia OIC option is very similar to what the federal government offers under the Fresh Start Initiative. The forms must be submitted to request a Georgia OIC. In fact, the forms are nearly identical to the tax forms the IRS requires with their OIC program.

Reasons for An Offer In Compromise

Taxpayers have three circumstances whereby they can settle their taxes with the state:

(1) Doubt as to Collectability
(2) Doubt as to Liability, or
(3) Economic Hardship.

The DOR defines Doubt as to Collectability as meaning that doubt exists that the taxpayer could ever pay the full amount of tax owed. Furthermore, they will consider Doubt as to Collectability OIC’s when the taxpayer is unable to pay the taxes in full either by selling assets or through an installment agreement. The DOR defines Doubt as to Liability as meaning a legitimate doubt exists that the taxpayer owes part or all of the taxes owed. Finally, the DOR explains Economic Hardship to indicate that the taxpayer does not doubt the delinquent tax amount is correct. Moreover, the DOR believes they can collect the amount of money owed but doing so would create an economic hardship for the taxpayer.

GA Offer In Compromise Eligibility

For a taxpayer to be eligible for an Offer-in-Compromise, the taxpayer must meet all of the following conditions:

• Up to date with all tax return filing obligations,
• Received a final notice of assessment for all state taxes that they owe, and
• Not the subject of an active or open bankruptcy case.

GA State Offer In Compromise Requirements

Below you will find requirements a taxpayer must meet to submit an Offer In Compromise:

• The taxpayer must maintain compliance with all filing and payment obligations while an OIC request is pending. Moreover, it includes estimated tax payments.
• The taxpayer must complete Form OIC-1 – Offer in Compromise
• The taxpayer must complete Form CD-14C – Collection Information Statement for Wage Earners and Self-Employed Individuals

Required Documents for a GA State Offer In Compromise

The following is a list of documents that the DOR requires with the submission of an OIC application:

• Recent pay stub or earnings statement copies from the taxpayer’s employers
• Copies of the three most current months of bank statements
• List of Notes Receivable, if applicable
• Copies of the most recent statement from any other sources of income. It includes income sources such as rent income, interest income, dividends, Social Security, pensions, rent subsidies, a court order for child support, and alimony
• Schedules of depreciation from your accountant (if it applies)
• Copies of recent investment and retirement account statements
• Copies of recent lender loan statements that show the monthly payment, loan payoff amount, and balances. For example, auto loans, mortgages, 2nd mortgages, home equity loans and so forth.
• Documentation to support any exceptional circumstances described in Section 3 “Explanation of Circumstances” on page 2 of Form OIC-1, if applicable
• Attach a Form RD-1061, Power of Attorney, if applicable, or not currently on file with the DOR

Filing Process

The OIC application, including all required forms and supporting documents, should be mailed to the Georgia Department of Revenue. The address is:

Georgia Department of Revenue
Offer in Compromise Program
1800 Century Blvd., NE, Suite 9100
Atlanta, Georgia 30345-3209.

Alternatively, taxpayers may upload and submit their OIC Application via their login with the Georgia Tax Center.

The DOR states that the offer amount must equal to, or exceed the minimum offer amount. Specifically, the minimum offer amount equals the net equity of the taxpayer’s assets plus the amount that the DOR projects that they could collect from the taxpayer’s future income.

Georgia law requires that each OIC application include a $100 nonrefundable application fee. The taxpayer must it via certified check or money order when it is filed. However, the DOR may waive the fee if the taxpayer qualifies for a poverty waiver. If the application is accepted, then this fee will be applied against the taxes owed.

GA State OIC Review and Determination

The DOR will first conduct an initial review of the taxpayer’s submitted OIC to determine if the application is complete or if additional information or documentation is required. After that, the DOR will conduct an official review and evaluation of the taxpayer’s OIC application. The DOR may contact taxpayers during this phase in the process to request additional documentation or to clarify an item. The review and evaluation of the OIC application will conclude with a recommendation to the State Revenue Commissioner as to acceptance or denial.

The DOR states that merely offering the minimum offer amount will not guarantee the acceptance of an OIC application.

Reasons for Denial

The DOR gives the following reasons/examples for why the state may deny an OIC application, despite the taxpayer having submitted an OIC application offering the minimum offer amount:

• Excess Expenses – The DOR uses national collection financial standards crafted by the IRS to figure out the threshold of expenses allowed for each necessary and living category. DOR will adjust these expenses that exceed the national collection standards to the maximum allowed.
• Inadequate Documentation – The taxpayer must substantiate most items on the financial statement. If the taxpayer does not provide adequate documentation to support income, expenses, and other things, the DOR will deny the offer.
• Omitted Items – If a taxpayer fails to include assets, income, or other essential items on the financial statement, DOR will reject the OIC application.
• Past Record of Non-Compliance – If DOR finds the taxpayer has a history of not complying with tax laws or willfully not complying with state tax laws, the DOR may reject the OIC.
• Valuation of Property – The DOR will assess the property owned by the taxpayer. If the taxpayer undervalues property listed on the final statement DOR may deny the OIC application.
• Trust Fund Taxes – If the taxpayer’s taxes owed relates to unpaid sales taxes or withholding taxes from employees, the DOR may reject the OIC application.
• No In the Best Interests of the State – If the State Revenue Commissioner finds the offer is not in the best interests of the state, then the state will not accept the offer. Although the law allows the Commissioner to accept the offer, there is no obligation to do so.

DOR Exceptions to Minimum Offer Amount

On the flip side, the DOR also states that in some circumstances they may accept an OIC application that offers less than the minimum offer amount. Furthermore, they mention that the state may take the minimum offer amount in situations where the OIC application is being submitted seeking relief under Economic Hardship conditions. The DOR further states that Economic Hardship circumstances may include factors such as old age, terminal illness, or any other factors that will affect the ability for the taxpayer to pay the total minimum offer amount and at the same time pay reasonable living expenses for themselves or their family.

Decision Notification and Next Steps

The DOR will issue a notice to the taxpayer via mail. The notice will state whether the Offer-in-Compromise Application has been accepted or rejected.

If the State Accepts the Offer

If the taxpayer has their Offer In Compromise accepted, the state will notify them by mail. The letter will inform the taxpayer of the due date to send payment (generally 60 days) or under a payment plan agreement. The state will release any state tax liens related to the state back taxes. However, before doing so the DOR needs to receive payment in full.

If the State Rejects the Offer

If the DOR believes that an OIC is appropriate, but that the taxpayer can pay more (a counter-offer) they will contact the taxpayer directly. Usually, the taxpayer can take the counter-offer without submitting more paperwork.

If the taxpayer’s OIC gets rejected and the DOR states it is because their financial analysis indicates that the taxpayer can pay a higher amount, then the DOR will require full payment or payments through an installment agreement.

One Option Where Asking For Help Makes Sense

Because of the complexity surrounding Offers In Compromise, taxpayers should consult with a licensed tax professional with experience with working with the Georgia Department of Revenue. If you would like a free consultation and an idea of whether you meet eligibility standards, start your search below and filter by the Georgia Department of Revenue to find top tax professionals that can assist.

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific help regarding your tax situation, contact a licensed tax professional or tax attorney.

Delinquent Georgia Tax Penalties & Penalty Abatement

Concerning unpaid GA income taxes, Georgia state assesses two penalties that a taxpayer should know. The first is the Late Filing penalty. The state will assess the Late Filing penalty. The state assesses this penalty when a taxpayer does not file a tax return by the due date, including extensions.  The Late Filing penalty is 5% of the tax due. Moreover, the DOR will assess an additional 5% for each extra month the return is late, up to a maximum of 25% of the tax due.

The second penalty is the Late Payment penalty. The Late Payment penalty is 0.5% of the unpaid tax due and an additional 0.5% of the outstanding tax for each extra month. The maximum is up to a maximum of 25% of the tax due.

The combined total of both penalties above cannot exceed 25% of the tax due on the return due date.

Additionally, GA applies interest for each month (or part of a month) that a delinquent tax goes unpaid. The annual rate equal to the Federal Reserve prime rate plus 3% until the taxpayer pays the taxes owed. Interest for months before July 1st, 2016 accrues at a rate of 12% annually or 1% per month.

Consequently, penalties and interest taxpayers do not file or pay when required.  Therefore, a taxpayer should always file their tax return regardless of whether they can pay or pay in full. Moreover, a taxpayer should make a partial payment (if they cannot pay in full). It can help the taxpayer avoid or lessen the impact of the penalties mentioned above and interest.

GA State Interest Abatement

In certain situations, the Commissioner of Georgia’s Department of Revenue may waive the collection of interest charges. GA may waive interest charges in whole or in part on any unpaid taxes. However, generally, this only occurs if he or she determines the delay in the payment of taxes was due to the inaction or action of the DOR. The taxpayer needs to illustrate that the DOR’s actions caused the interest to accrue. Alternatively, the taxpayer can show the DOR failed to act in a manner that caused interest to accrue.

GA State Penalty Abatement

The DOR may consider a full or partial penalty abatement if reasonable cause exists. More specifically, the default giving rise to the penalty must be due to reasonable cause and not due to gross or willful neglect or disregard of the law or regulations or instructions issued according to the law. The DOR states that reasonable cause happens from circumstances beyond the taxpayer’s control.

The DOR provides the following list of possible circumstances that it may consider reasonable cause concerning penalty waivers:

• The taxpayer had a delay because of erroneous information given to the taxpayer by an employee of the DOR.
• The taxpayer had a delay because of the death or serious illness of the person or an immediate family member of that person who is responsible for preparing the return or making payment to the DOR.
• The unavoidable absence of the taxpayer caused a delay.
• Fire or another casualty of the taxpayer’s place of business/residence or business/personal records caused the delay.
• Delay was caused by reliance on competent tax advisors where the advisor acted under clear mistake or misunderstanding of the law
• Taxpayer encountered embezzlement or some other criminal act by the person responsible for filing or paying the taxes which caused the delay.
• Concerning the late payment penalty, DOR will consider whether the taxpayer paid more than 90% of an income tax liability by the due date of the return.
• Whether the taxpayer has a good filing history may be considered along with other factors.

Realize that the reasons mentioned above are not the only circumstances in which the DOR will consider penalty abatement. Moreover, in many cases, the DOR will request documentation to substantiate the details. Lastly, if your business seeks penalty abatement for sales tax penalties, read the documentation provided by DOR here.

How To Request GA State Tax Penalty Abatement

To request penalty abatement, the taxpayer may either file Form TSD-3 – Request for Penalty Waiver, or log in to their Georgia Tax Center account and file the request online. While the DOR provides the normal circumstances listed above, the DOR will consider each case on its own merits based on either the information and/or documentation supplied by the taxpayer.

If you need assistance to pursue penalty abatement, reach out to a tax professional that has experience working with the Georgia Department of Revenue.  Or start your search below and select the applicable tax agencies you are having issues with.

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific advice regarding your tax situation, contact a licensed tax professional or tax attorney.

State of Georgia Tax Payment Plans Overview

Payment Agreement (Installment Agreement)

Georgia’s Department of Revenue (DOR) offers taxpayers who owe GA state income taxes payment plans for those that cannot pay in full. The DOR refers to these payment agreements also as an Installment Agreement.  These agreements provide taxpayers the ability to pay off their tax balance over a series of monthly payments. Payment plan agreements generally do not have durations longer than 60 months and they must satisfy penalties and interest. Taxpayers can request a payment plan, however, situations exist whereby a taxpayer will not qualify.

Situations Where DOR Will Not Approve a Payment Plan

Just like most state tax payment agreements, the DOR has a list of situations for when they will not approve a payment agreement or installment agreement.

In order for the DOR to review a request for a Payment Agreement the following must be met:

• The taxpayer must not be in bankruptcy,
• The taxpayer must not have a pending Offer-in-Compromise application filed,
• All of the taxpayer’s state tax returns required to be filed must be filed (usually the last five years), and
• The delinquent taxes owed must not have been assigned to a private collection firm
• The taxpayer must agree and meet all future tax obligations (estimated taxes on time, filing on time)

How to Request and Set Up a Payment Plan With DOR

Individuals and businesses who owe the state of Georgia can set up a payment plan in a few different ways. The state requires a minimum payment amount of $25 dollar per month.  DOR doesn’t seem to have set a liability limit threshold (like the IRS does) in requesting a tax payment plan. Moreover, taxpayers should always consider other alternatives since interest and the late payment penalty continues to accrue.

Leverage a Licensed Tax Professional

Taxpayers can reach out to a licensed tax professional who has experience resolving tax problems with Georgia's DOR. Using a tax professional will not only generally reduce the amount of time required by the taxpayer, but it will also generally lead to better results.

Submit a Request Through the Georgia Tax center

The DOR provides taxpayers a way to request a payment agreement online. Taxpayers can request their payment plan online using the Georgia Tax Center. Once logged into the system, individuals and businesses can propose a payment amount and schedule.

With payment sent by electronic funds transfer (EFT), DOR charges a $50 dollar fee to set up the payment agreement. If the taxpayer remits monthly payments via paper check, the setup fee rises to $100. If the taxpayer qualifies as low-income, the DOR may reduce the fee to $25 dollars. In either case, the fee is non-refundable and gets added to the taxpayer’s overall tax balance in figuring out the monthly payment amount.

Submit a Paper Application

DOR encourages taxpayers to use the Georgia Tax Center to request a payment plan. However, they will accept paper applications that taxpayers can mail. Although the paper application doesn’t seem to be up to date with the 60-month new duration threshold, taxpayers can still utilize it. Taxpayers can find the paper application here.

Once complete, taxpayers can mail the request to:

Georgia Department of Revenue
Processing Center
PO Box 740396″
Atlanta, GA 30374-0396

Notification of An Accepted Payment Plan Agreement

Whether utilizing the online or paper application, the DOR will notify the taxpayer if they accept or deny their payment plan. The DOR states that taxpayers should expect to be notified as to the status of their Payment Agreement applications within 30 days after the DOR has received the application. If the DOR accepts the proposal, the taxpayer gets notified via mail. The letter will include the duration (number of monthly payments). It will also tell the taxpayer the amount of each monthly payment, and when the taxpayer must make the first payment.

Additional Notes

Interest will continue to accrue on the taxes owed, and the DOR may still confiscate state or federal refunds. However, all other forms of enforced collection will be suspended as long as the taxpayer stays current with the terms of the payment agreement.

Modifying An Existing GA Tax Payment Plan

If a taxpayer accrues a new balance or cannot make the monthly minimum payment on their existing agreement, DOR usually requires a new agreement. In this case, the DOR charges the taxpayer with a new setup fee. However, if the taxpayer simply needs to change their bank and routing number, they must notify DOR at 404-417-2122 at least five days before the next draft.

Insufficient Funds

If the taxpayer has a check or draft fail for insufficient funds, the taxpayer will receive a “Cure/In Grace letter.” The letter will let them know when payment is due by with an additional $25 dollar return fee to prevent the agreement from going into default.

In summary, the DOR offers payment agreements for both businesses and individuals. DOR gives GA state taxpayers this option if they cannot pay their balance in full. When in doubt, leverage a licensed tax professional by starting a search below or contact the DOR directly.

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific advice regarding your tax situation, contact a licensed tax professional or tax attorney.

Georgia State Tax Resolution Options for Taxes Owed

Common GA Tax Resolutions

The Georgia Department of Revenue (the “DOR”) is responsible for collecting all the State’s taxes, including the income tax.

Once a tax liability becomes due through a taxpayer filing a tax return with no payment, or an audit assessment, the DOR will mail an Official Assessment. The taxpayer has 30 days to either pay or appeal the Official Assessment. If the taxpayer does not pay or appeal within 30 days, then the DOR will issue a State Tax Execution and impose a 20% collection fee. The DOR records the State Tax Execution in the county public records – which acts as a lien on the taxpayer’s property. Further, after the issuance of a State Tax Execution, the DOR may begin enforced collection actions.

Enforced collection actions include garnishment, the seizure, and sale of personal property, a levy placed on bank accounts, Treasury Refund Offsets (seizure of federal tax refunds), and the use of collection agencies. Therefore, it is essential for taxpayers with delinquent taxes to attempt to resolve their outstanding liabilities.

Taxpayers who owe delinquent income taxes to the State of Georgia have a few main options available to reach a reasonable resolution. Although not exhaustive, here a few options:

Payment Agreement (Installment Agreement)

• A payment agreement/installment agreement is an arrangement where the taxpayer reaches a deal with the DOR to make monthly payments until they pay in full the past due tax liability. Generally, the DOR will offer payment plans or installment agreements for up to 60 months. In other words, taxpayers must pay off the balance, including interest and penalties within 60 months.

Offer-in-Compromise

• A Georgia Offer-in-Compromise is an agreement where the taxpayer agrees to pay a lump sum in settlement of the entire tax liability. The program offered by the DOR is very similar to the Offer In Compromise program provided by the IRS. Not all taxpayers meet eligibility standards as the DOR has specific requirements that the taxpayer must meet. Taxpayers in many cases can end up settling their tax liabilities for less than they owe.

Penalty Abatement

• Penalty abatement is a request asking the DOR to waive some, or all, of the assessed tax penalties. In similarity to the IRS, “reasonable cause” must exist. In other words, willful neglect or disregard of law does not constitute reasonable cause. Reasonable cause exists when circumstances outside of the taxpayer’s control lead to non-compliance.

Alternative Options That May Be Available

Innocent Spouse Relief

The State of Georgia offers Relief from Joint Liability for certain taxpayers who filed joint returns. Innocent Spouse Relief is available in certain circumstances to taxpayers whose taxes owed attributable to their spouse. Taxpayers who file jointly are both responsible for the joint tax liability. Therefore, in certain situations, the DOR may relieve one taxpayer on the joint tax return if he or she is not responsible for failing to pay or report the tax due on a joint income tax return.

A taxpayer must meet the following conditions for Innocent Spouse Relief eligibility:

• A joint tax return that resulted in additional tax liabilities because the income of one person was reported incorrectly or not reported at all
• The individual seeking relief can prove he or she had no knowledge and reason to know income was not reported or erroneously reported; and
• Under the circumstances, it is unfair to hold the person accountable for tax on the omitted or incorrectly reported income.
• Tax taxpayer has already obtained relief from a Federal taxes owed under Section 6015 of the Internal Revenue Code

The DOR generally will not consider a person for Innocent Spouse Relief unless the individual was treated as an Innocent Spouse under IRS guidelines.  Therefore, to request Innocent Spouse Relief taxpayers are instructed to contact the DOR at 877-423-6711, and the information needed to submit a relief request will be given to them. The taxpayer must provide documentation establishing the IRS granted relief for the tax period in question.

Appeal Rights

As discussed herein, the taxpayer may appeal Proposed Assessments via the internal DOR protest process. Further, taxpayers may appeal Official Assessments and State Tax Liens to the GTT. The GTT generally has jurisdiction over appeals of tax matters involving the DOR. It includes the authority to review decisions of the DOR concerning all of Georgia’s taxes. Taxpayers can appeal further the decisions of the GTT to a local Georgia Superior court. Furthermore, under certain circumstances, taxpayers may appeal directly to a Georgia Superior court.

Challenge the Assessment/State Tax Execution

Proposed Assessments: If the taxpayer has a proposed assessment for additional income tax due, they may file a protest with the DOR within 30 days from the date of the proposed assessment. Taxpayers can request this protest online via their Georgia Tax Center accounts or by mail (complete the following form). Taxpayers cannot appeal proposed assessments to the Georgia Tax Tribunal.

Official Assessments: Official assessments can be appealed to the Georgia Tax Tribunal (GTT) or in a local Georgia Superior court within 30 days from the issue date on the official assessment notice.

State Tax Execution: As discussed above, if a taxpayer does not appeal or pay an official assessment within the 30 days the DOR may issue a state tax execution (a state tax lien). Taxpayers can appeal this action with either the GTT or in an appropriate Georgia Superior court.

Taxpayers can find more information regarding filing appeals with the GTT here. While taxpayers have the option to file in Georgia Superior court, there are particular requirements for doing so. Taxpayers considering this option should consult with an attorney.

The Georgia Voluntary Disclosure Agreements

The DOR has a Voluntary Disclosure Agreement (VDA) program designed for taxpayers who have had no contact by the DOR and have unfiled or underreported unpaid taxes. If these taxpayers come forward, they will usually receive a waiver of all penalties and an extended time limit to pay their back taxes. The DOR refers to this extended period as the “look-back period,” which DOR usually grants for three years.

Taxpayers who believe they qualify for this program should apply via mail or e-mail. Taxpayers can find more information on the application process and procedures for filing a VDA program application here.

Bankruptcy

Bankruptcy is not inexpensive. Taxpayers with substantial personal liabilities in addition to taxes owed may want to consider this option. Generally, taxpayers can discharge some state taxes owed through bankruptcy proceedings. Therefore, taxpayers should contact an experienced tax and bankruptcy attorney to pursue this option.

The Statute of Limitations (SOL)

A taxpayer should first determine their legal rights concerning Georgia law concerning the statute of limitation rules for the collection of unpaid taxes. In Georgia, the DOR has seven years from the date of assessment to file a lien if the assessment was issued before February 21, 2018. The DOR has five years from the date of assessment to file a tax lien if the assessment was issued on or after February 21, 2018. Once the DOR files a tax lien, they have ten years from that date to collect the unpaid taxes. The 10-year time clock may be tolled (paused) under certain circumstances. For example, when the taxpayer is in a Payment Agreement with the DOR or when the taxpayer has filed bankruptcy.

Lien Releases

The DOR will only release a tax lien after they have received confirmation that the past due liability has been paid in full or satisfied via an approved Offer-in-Compromise payment.

Practical Considerations

As a useful tip, the taxpayer should not hesitate to raise disagreements to a supervisor within the DOR. Often, a different person and the authority and experience of a supervisor can help resolve tax issues amicably.

Additionally, Georgia has a Taxpayer Resolution Unit that serves to ensure that taxpayer rights are protected and that they receive timely and courteous service from the DOR. The Taxpayer Resolution Unit states that if all administrative options have been exhausted, they can help facilitate rapid and equitable resolution. Taxpayers can contact the Taxpayer Resolution Unit at taxpayer.resolution@dor.ga.gov.

Conclusion

Taxpayers have many options to resolve outstanding tax liabilities with the State of Georgia. As a result, taxpayers should resolve taxes owed sooner rather than later. The longer a taxpayer takes to resolve unpaid tax liabilities, the higher penalties and interest go. Therefore, taxpayers should consult with a tax professional that has experience with the Georgia Department of Revenue.  A licensed tax professional can help taxpayers navigate possible options and find the most appropriate plan of action. 

Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific help regarding your tax situation, contact a licensed tax professional or tax attorney.

Haven’t Filed Taxes in Years? Consequences by Year

If you haven’t filed a tax return for several years, it could lead to some severe consequences and financial losses. You could lose your chance to claim your tax refund or end up owing the IRS thousands in back taxes, penalties, and interest. Fortunately, you can still file past due tax returns and may be able to resolve some of these issues. To help you out, this guide explains what happens when you don't file your taxes, and it breaks it down into a year-by-year timeline. Looking for a local pro to help with unfiled taxes? Check these results for local pros that help with years of unfiled tax returns.

Table of Contents

• Overview of Basic Filing Requirements
• Unfiled Taxes Last Year: Missed the IRS Tax Return Filing Deadline
• Haven’t Filed Taxes in 2 Years
• Haven’t Filed Taxes in 3 Years
• Haven’t Filed Taxes in 5 Years
• Haven’t Filed Taxes in 10 Years

Overview of Basic IRS filing requirements

You are only required to file a tax return if you meet specific requirements in a given tax year. The most common reason people need to file is when they earn over the standard deduction which is also referred to as the income filing threshold. For the 2022 tax year, these amounts were as follows:

1. $12,950 for single filers or married taxpayers filing separate returns.
2. $19,400 for head of household filers.
3. $25,900 for married taxpayers filing jointly or qualifying widow(er)s. 

These amounts have fluctuated over the years. They nearly doubled in 2018 with the passage of the Tax Cuts and Jobs Act (TCJA), and every year, they increase with inflation. If you're dealing with years of unfiled returns, you’ll need to find the income filing threshold for the appropriate tax year to determine if you had a filing requirement that year. For example, use the 2016 income filing threshold to decide whether or not you should have filed a tax return in 2016. 

In some cases, you may still need to file a return even when you earned less than the filing threshold amount. Some other reasons you may need (or want) to file include the following:

1. You had net self-employment earnings of $400 or more — This refers to your net self-employment income which is your self-employment income minus expenses. For instance, if you earned $1000 in self-employment income and had $700 in business expenses, your net self-employment income is just $300 so it doesn't trigger a filing requirement. 
2. You claimed the advanced premium tax credits throughout the year — This credit offsets the cost of health insurance, but it's based on your adjusted gross income. To ensure you don't owe extra money or deserve a larger credit, you need to file a tax return. 
3. You qualify to receive a refundable tax credit — Refundable credits put money in your pocket. They include the earned income tax credit, the child tax credit, and the child care credit. You must file a tax return to get refundable credits. 
4. You are owed a tax refund because you had taxes withheld from your paycheck or you made estimated tax payments — If you paid more tax through the year than you owe, you should file a return to claim a refund. This can include estimated payments made directly to the government or taxes withheld from your paycheck.
5. You are a dependent with more than $1,100 in unearned income — The rules for dependents vary if you are over 65, blind, or married.
6. You owe special taxes such as the alternative minimum tax or a tax on a qualified retirement plan. 
7. You have tips or wages that your employer didn't withhold Social Security or Medicare tax from.

You must file your tax return by the deadline set by the IRS each year. This is usually April 15th, but in special cases such as during the COVID pandemic or for areas experiencing natural disasters, the IRS extends the deadline. If the 15th is on a weekend or holiday, the due date moves to the next business day.

Unfiled Taxes Last Year: Missed the IRS Tax Return Filing Deadline

The repercussions for failing to file a tax return depend on whether you have to pay taxes or are due a refund. You also have the option to request a six-month tax-filing extension if you’re going to miss the deadline.

If You Are Due a Refund

Good news—you won’t owe any penalties if you are due a refund on your tax return. You should still file as soon as possible because you can’t receive your refund check unless you file. If you don’t file within three years of the return’s due date, the IRS will keep your refund money forever.

It’s possible that the IRS could think you owe taxes for the year, especially if you are claiming many deductions. The IRS will receive your W-2 or 1099 from your employer(s). However, the IRS won’t know about your itemized deductions or business expense deductions until you file, so they could come after you if they think you should have sent them a check for taxes owed.

You can prevent this issue by filing your return as soon as possible. You can also get an automatic six-month filing extension by submitting Form 4868, as long as you file on or before the due date of the tax filing deadline.

If You Owe IRS Taxes

You could owe both the failure-to-file (FTF) and failure-to-pay (FTP) penalties as soon as your return is a single day late. The FTF penalty is 5% of the tax debt owed per month, and the FTP penalty is 0.5% of the taxes owed. However, there are ways to avoid or minimize these penalties.

You can postpone the assessment of the FTF penalty by requesting a six-month filing extension. The extension will give you until around October 15th to file your return. After that, the IRS will assess the FTF penalty on your tax debt if you still haven’t filed.

Even if you request an extension, you’ll still owe the FTP penalty unless you’ve paid at least 90% of your tax liability for the year. You can estimate this amount and send the IRS some money when you submit your filing extension to minimize the FTP penalty.

The IRS will continue to assess these penalties—along with interest—each month that your return is past due and your tax bill is unpaid. Eventually, the IRS may become more aggressive if you don’t respond to their requests for payment of your tax liability.

Haven’t Filed Tax Returns in 2 Years

If You Are Due a Refund

The clock is ticking on your chance to claim your refund. You should file your tax returns for both tax years to make sure the IRS doesn’t get to keep your tax refund check.

If the IRS thinks you may owe for these tax years, you may have received one or more notices from the IRS by now. Once the IRS assesses tax against you, they can begin seeking collection, which could eventually result in a levy of your bank account or garnishment of your wages.

If You Owe Federal Income Tax

You may be receiving IRS notices about your tax liability in the mail, and penalties and interest will continue to add onto your bill. The IRS may also decide to file a Substitute for Return (SFR) on your behalf.

The SFR usually claims you owe more in taxes than you should. That’s because the IRS is using your W-2 or 1099 to determine your income, but they have no way to calculate your potential deductions or credits. So you could miss out on some significant tax breaks. In fact, the SFR only provides the taxpayer with the standard deduction and one exemption.

The statute of limitations for the IRS to collect taxes—which is generally ten years—also doesn’t begin until you file your return. That means the IRS has more time to seize your assets for unpaid taxes.

Even if you can’t afford to pay off your full tax bill right now, you should file your delinquent returns right away.

Haven’t Filed a Tax Return in 3 Years

If You Are Due a Refund

At three years, this is your last chance to claim your tax refund money! Remember—once it’s been three years from the due date of the tax return, you no longer have the right to claim your tax refund. Not only can’t you claim the money, but the IRS also won’t credit your account for the refund amount or apply it to a future return.

The IRS may have sent you notices informing you that they have not received your tax return. If they think you may owe taxes for one or more tax years, they could assess tax on your account if you don’t respond to these notices. After that, the IRS sends your account to collections, and your assets, income, or credit rating could be at risk.

If You Owe Federal Income Tax

You could face any or all of the following consequences if you have an unpaid tax liability:

1. Late payment penalties, failure to file penalties, and interest could substantially increase the amount you owe to the IRS.
2. The IRS can file an SFR on your behalf that doesn’t give you the deductions and credits you’re entitled to receive.
3. When the IRS files the SFR, they assess tax against you, and the collections process begins. You could receive an intent to levy notice informing you that the IRS may seize assets. An intent to levy notice means they can take funds from your bank account or a portion of your wages.
4. A federal tax lien can be filed against your property, making it difficult to sell, refinance, or borrow against your assets.

Your tax problems can start to spiral out of control at this point because the amount you owe is growing and the IRS is proceeding further along in the collections process. You may feel as though your trapped and don’t know how to regain control of your financial situation.

Haven’t Filed Taxes in 5 Years

If You Are Due a Refund

It’s too late to claim your refund for returns due more than three years ago. However, you can still claim your refund for any returns from the past three years. Don’t let the IRS keep any more of your money!

If You Owe Federal Income Tax

There’s a good chance that the IRS has noticed that you have unfiled returns. An SFR may have been filed for several tax years, the tax has been assessed, and your account is in collections. A Notice of Federal Tax Lien may have been filed to notify other credits of the IRS claim against your property.

You probably owe the IRS more money than you can pay back at once. There are payment plan options as well as tax settlement options you should consider. The IRS requires taxpayers who use these programs to file all delinquent tax returns, and you may need assistance from a tax professional with this process.

Criminal tax prosecution isn’t typical, but it is a possibility if the IRS believes you’ve been willfully evading the tax laws. These cases can result in huge fines and even jail time.

Haven’t Filed Taxes in 10 Years

If You Are Due a Refund

You can’t seek a refund for the returns that more than three years ago. You can—and should—still file your past three years of tax returns.

If You Owe Taxes

IRS collections have probably been hounding you for several years. You may feel that there’s no way you could even file all your back tax returns, much less pay off ten years' worth of taxes owed, plus penalties and interest.

The IRS has most likely filed a Notice of Federal Tax Lien and attempted to seize one or more of your assets. You could even have your passport revoked if your taxes owed is certified to the State Department as seriously delinquent.

Your tax problems won’t just go away. The IRS only has ten years to collect from taxpayers, but the clock doesn’t start ticking until you file a tax return or the IRS files for you (aka SFR). If you haven’t done one of those things, the IRS has unlimited time to keep trying to collect from you.

Talk to a tax professional about your options. You will probably need help filing a decade or more of late tax returns. You can also discuss your payment options, which could include installment agreements, Offers in Compromise, Hardship, or penalty abatement.

What to Do If You've Never Filed Taxes

If you've never filed a tax return, it can be confusing and scary to think about the process. The important thing to remember is that the IRS is relatively reasonable. The agency wants to work with people and help them file tax returns. As long as you haven't committed tax fraud or evasion, you will be able to file your unfiled returns and make arrangements on your tax debt. 

If you're worried that you may have committed fraud, evasion, or another tax crime, you should contact a tax attorney. They can answer your questions and help you identify the best path for dealing with your unfiled returns. Even if you're not worried about tax crimes, you may still want to have a tax professional help you. A tax pro knows how to navigate the IRS's rules and processes. They can help you deal with your unfiled returns and get back into good standing with the IRS. 

After you contact a tax pro, the first thing you need to do is gather all of the necessary documents. This includes your W-2 forms from each employer you worked for during the year, as well as any 1099 forms if you were self-employed or had other income sources. If you plan to itemize, you should also gather information about your itemizable expenses. That includes medical bills, homeowner's insurance and interest, state and local taxes, and similar expenses. 

If you own a business, you will need all of the income documents and expense receipts for the business. Once you have all of your documentation in order, you can begin filling out your tax return. Make sure to use a tax return from the right year. These forms change from year to year.

If you're not sure where to start, there are many resources available to help you, including the IRS website and online tax preparation software. Note that you may be limited in how far back you can go with tax prep software. A tax professional can walk you through the process step-by-step and help ensure that you don't miss any important details.

Once your return is complete, all that's left to do is file it. You can do this electronically using the IRS e-file system, or you can mail it in. If you're owed a refund and it's less than three years from the original return due date, you can expect to receive it within a few weeks. If you owe tax to the IRS, you'll need to make arrangements to pay. Note that the processing time can be longer than usual when you're dealing with very old returns.

No matter what your situation is, filing your taxes for the first time can be a bit daunting — especially if you've never filed a return. But by gathering your documents, getting help if you need it, and taking care of business, you can get it done with minimal stress.

Self-Employed and Never Filed Taxes

If you're self-employed and never filed, you are going to face more paperwork than the average taxpayer. An employee simply has to enter the details from their W2 wage statement into their tax return, but a self-employed person has to enter detailed information about their business revenue and expenses. This can be daunting, especially if you're self-employed and never filed taxes before. 

Here is what you need to do to catch up on your self-employed taxes:

1. Figure out which return you need to file — The return you need to file depends on your business structure. If you're a sole proprietor, you should file a Schedule C with your individual tax return or use Schedule F if you're a farmer or fisher. Partnerships and corporations need to file a stand-alone return for the business. Then, you report your share of the business income on your personal income tax return.
2. Gather income documents — If you have a point of sale system, you can use those reports to figure out your income. Otherwise, go through your bank and payment accounts and find all your payments from clients. 
3. List your expenses — Look through your bank and credit card statements and identify all of the expenses that were for your business. Make sure to be thorough if you miss expenses, you'll have a higher than needed tax bill.

Once you've worked through these steps, you're ready to put your self-employment income on your tax return. If you have employees or were supposed to be paying sales tax, you will have additional business tax obligations. A tax pro can help you figure out what you need to do and which forms you need to file. 

What Happens If You Don't File Your Taxes for Years?

If you do not file your taxes for years, the IRS can take legal action against you. This can include filing a lien against your property or seizing your assets. In some cases, you may also be subject to criminal charges. If you are facing any of these consequences, it's important to speak with a tax attorney or another tax pro as soon as possible.

How Does the IRS Know If You Haven't Filed a Tax Return?

The IRS uses a number of methods to track down people who haven't filed their tax returns. In particular, the IRS can find out if someone hasn't filed their taxes through third-party reporting. This means that financial institutions, employers, and other entities report information to the IRS about taxpayers. 

For example, banks will report interest income earned by taxpayers to the IRS. Employers will report wages paid to employees. If you're self-employed, your clients may send a 1099-NEC to the IRS. Additionally, taxpayers who make estimated tax payments will have those payments reported to the IRS.

If the IRS sees income documents from a taxpayer who hasn't filed a return, the IRS may assume the person should have filed. Then, the agency may send a notice asking for the return to be filed. If the taxpayer doesn't respond, the IRS may take further action, including levying fines or filing liens. In some cases, the IRS may even pursue criminal charges.

Haven't Filed Taxes — Stimulus Payment

If you did not receive a stimulus payment, you may be able to claim it on your tax return. The federal government sent out three rounds of stimulus payments in 2020 and 2021. If you qualify but didn't receive the 2020 stimulus payments, you can file a 2021 tax return to claim them. Similarly, if you didn't receive but qualified for a stimulus payment in 2021, you can claim it on your 2021 tax return.

To qualify, your adjusted gross income needs to be under a certain level. A tax pro can answer your questions and help you file your returns. The credit is called the Recovery Rebate Credit. If the credit creates a refund, you have three years from the filing deadline to claim it. If the rebate credits reduce your tax bill but don't generate a refund, you have more time as explained above.

How to File Past Due Tax Returns — Get Help Now

It can take a lot of work to find the information you need to file past-due tax returns for several years. You may want to contact a tax professional for help and to make sure you don’t make any mistakes.

For more information, visit our page on how to file unfiled tax returns.

PA State Back Tax Resolution Options

Introduction: An Overview

The Pennsylvania Department of Revenue (the “DOR”) is in charge of collecting the State’s taxes, including the income tax. Once all appeal rights have been exhausted on the tax liability, the DOR will mail a collection notice to the taxpayer. Shortly after that, if the taxpayer has not responded to the notice, the DOR will attempt to call the taxpayer.

If the liability remains outstanding after 90 days from the date on the notice, the DOR will begin collection actions. Generally, the DOR will file a tax lien against the taxpayer in the amount of the delinquent tax due, including penalties and interest. Further, the DOR may pursue a wage garnishment against the taxpayer. It is essential that taxpayers with taxes owed attempt to resolve their outstanding liabilities.

Various PA Individual Tax Resolution Options

Taxpayers who owe delinquent income taxes to the State of Pennsylvania have four main options (not exhaustive) available to reach a reasonable resolution. These are:

Deferred Payment (Installment Agreement),

Taxpayer Forgiveness,

Penalty Abatement, and

Innocent Spouse Relief

A Deferred Payment Plan (DPP) is a payment arrangement whereby the taxpayer makes monthly tax payments until the taxpayer pays off the tax liability. Taxpayers in certain situations can make a written request for penalty abatement. In other words, ask the DOR to waive part or all of their tax penalties. Taxpayer Forgiveness is a program where eligible taxpayers can reduce some or all of their tax liability depending on their income status and family size. Finally, a taxpayer can request Innocent Spouse Relief in certain situations where past due tax liabilities are attributable to their spouse.

Statute of Limitations

In Pennsylvania, there is no statute of limitations on the collection of unpaid taxes. Therefore, the DOR may engage in collection actions for taxes owed for an unlimited duration.

Deferred Payment Plan (DPP)

The PA DOR refers to tax payment plans as Deferred Payment Plans. The DOR does not have a form that should be filed to establish a DPP. Instead, taxpayers are instructed to call the DOR Collection Unit (717-783-3000). Alternatively, they can visit a district office in person to establish a DPP. Taxpayers can find a list of District office locations here.

The DOR states that they will make every attempt to be flexible with the terms of a DPP.  The DOR will ensure that a taxpayer’s DPP makes financial sense. In other words, the DPP will not financially burden the taxpayer. The DOR will also avoid payment agreements that cause the taxpayer to incur unnecessary and outlandish interest charges.

Before the taxpayer may enter into a DPP, the taxpayer must file all tax returns. Generally, the DOR will ask the taxpayer for a 20% upfront payment with the remaining balance paid over five months. If the taxpayer is unable to meet these terms financially, then they may need to provide financial information. Generally, the DOR will request it to try to negotiate a lower monthly payment figure. Unfortunately, the DOR does not offer much guidance as to how it makes these determinations.

Taxpayer Forgiveness

Pennsylvania does not have a traditional offer-in-compromise program. However, they do have a program where low-income taxpayers can reduce or eliminate their tax liability through tax forgiveness credits when they file their return. For a taxpayer to receive tax forgiveness, they must complete the tax forgiveness schedule on the Form PA-40. The income of the taxpayer and the number of dependents the taxpayer is eligible to claim determines the level of tax forgiveness.

The DOR provides general eligibility requirements.

Eligibility for Tax Forgiveness

For a taxpayer to determine if they are eligible for the tax forgiveness program, they must figure out their eligibility income by completing PA-40 Schedule SP.  Taxpayers can find additional instructions on tax forgiveness.

Eligibility Income is different from taxable income. The taxpayer must include income reported on Form PA-40 plus the following non-taxed items:

• Interest, dividends, and gains that were exempt from Pennsylvania tax.
• Alimony.
• Insurance payments or the value of an inheritance: This amount includes the total proceeds from life or insurance policies. Also include inherited cash or the value of property received, as well as, any amount reported on federal Form 1099-R with distribution code “4” reported in Box 7 of the form.
• Gifts, awards, and prizes received in recognition of civic and social achievements or non-cash winnings from the PA Lottery.
• Nonresident income.
• Military pay received that that the taxpayer did not have to report as income on Form PA-40. It does not include hazardous duty pay or combat pay.
• The nontaxable gain on the sale of a residence
• The value of a scholarship, stipend, or fellowship that is not taxable
• Other cash payments received from people living outside the taxpayer’s household. Typical items included are personal support from a former spouse, gifts from grown children, nontaxable payments to an employer’s cafeteria plan, amounts received as a foster parent.

Some of the items not included as eligibility income are Social Security, unemployment, pension payments, and child support.

Determining the Percentage of Tax Forgiveness

Once the taxpayer has identified their eligibility income, they use the accompanying eligibility income tables from PA Schedule SP to determine the percentage of tax forgiveness allowed.

If the taxpayer is unmarried, separated, or filing on behalf of a deceased claimant they should use Table 1.  If the taxpayer is married (even if filing separately), they should use Table 2. The table will have the number of dependent children on the left-hand side. The taxpayer should find the row that matches the number of dependent children they have and then the column in that row that matches their eligibility income. Once found, the percentage of tax forgiveness will be at the bottom of that column.

Taxpayers may only claim minor dependents or adult children who are claimed as dependents on their federal income tax returns. For PA state tax forgiveness purposes, qualifying children include:

• Biological children
• Step Children
• Adopted Children
• Grandchildren of grandparents
• Foster Children of foster parents

However, uncles and aunts or unrelated persons may not claim a child as a dependent regardless of whether they claim them on federal income tax returns.  Taxpayers may claim adult children as dependents for tax forgiveness reasons if they meet the qualifications and claim them as dependents on 2008 federal income tax returns.

Generally, a taxpayer does not qualify for Tax Forgiveness if he or she is claimed as a dependent on someone else’s federal income tax return. One exception is if the person who claims the taxpayer also qualifies for Tax Forgiveness. For instance, say a student with a part-time job gets claimed by his or her parents on their federal income tax return. In this case, the student may claim Tax Forgiveness with his or her state tax return as long as the parents qualify.

Filing Process and Considerations

The taxpayer must attach the completed PA Schedule SP to their tax return to receive the tax forgiveness credits. Unlike filing considerations for a traditional offer-in-compromise, this program is mostly objective. The taxpayer must meet the income eligibility requirements to qualify. No other factors are generally considered such as the ability of the DOR to collect the taxes based on the taxpayer’s financial condition.

Innocent Spouse Relief

Pennsylvania offers Relief from Joint Liability (Innocent Spouse Relief).  This relief exists for those taxpayers who otherwise are not responsible for their spouse’s taxes owed under certain circumstances. The Taxpayers’ Rights Advocate has the responsibility of determining when to grant Innocent Spouse Relief. Pennsylvania offers three types of Innocent Spouse Relief:

1. Understatement of Tax
2. Separation of Liability
3. Income Allocation

Understatement of Tax

An understatement of tax is generally the difference between the total amount of tax that the taxpayer should have reported on the return and the amount of tax the taxpayer reported. A taxpayer may be relieved of joint liability for an understatement of tax, including penalties and interest if they meet all the following conditions:

1. The taxpayer filed a joint return which has an understatement of tax due to an erroneous item of the spouse
2. The taxpayer establishes that at the time they signed the joint return they did not know and had no reason to know that there was an understatement of tax; and
3. In consideration of all the facts and circumstances, it would be unfair to hold the taxpayer liable for the understatement of tax.

The DOR states that it will consider all the facts and circumstances of each case to determine whether it is fair to hold the taxpayer jointly responsible for the understatement. However, there are two factors that they specifically consider:

1. Did the taxpayer receive any significant benefit from the to; or
2. Was the taxpayer later divorced from or deserted by the spouse.

Separation of Liability

A taxpayer may be eligible for separation of liability relief if they meet one of the following conditions:

1. The taxpayer is divorced, widowed, or legally separated from the individual with whom they filed the joint return, or
2. The taxpayer and the individual with whom they filed the joint return have not been members of the same household at any time during the 12 months preceding the date of filing for Innocent Spouse Relief.

The DOR states that if a taxpayer qualifies for Separation of Liability Relief, they will generally allocate erroneous items between the taxpayer and their spouse or former spouse by determining how the erroneous items would have been reported if the taxpayer were to have filed a separate return.

Unless the former spouse also seeks Separation of Liability Relief, they will remain liable for the complete understatement of tax. The burden of proof lies with the taxpayer seeking tax relief in establishing the basis for separating the liability.

Income Allocation

A taxpayer may qualify for relief by Income Allocation if they are jointly liable for an underpayment of tax and the underpayment of tax is not attributable to income that would have been on their separate return if filed. Furthermore, a taxpayer may qualify for relief by Income Allocation if they failed to qualify for relief from joint liability through Understatement of Tax or Separation of Liability relief. When a taxpayer applies for tax relief through Understatement of Tax or Separation of Liability, the DOR will automatically consider whether relief by Income Allocation is appropriate.

Qualifying for Relief By Income Allocation

To qualify for tax relief by “Income Allocation,” all the following must apply:

1. The taxpayer is not eligible for relief via Understatement of Tax or Separation of Liability, or they are jointly liable for an underpayment of tax that is not attributable to income that would have been reported if they had filed a separate return;
2. Their spouse and the taxpayer did not transfer assets to one another as a part of a fraudulent scheme;
3. The spouse did not transfer assets to the taxpayer for the primary purpose of avoiding tax or the payment of tax;
4. The taxpayer has filed all required personal income tax returns and does not have an outstanding personal income tax liability for a tax year or years other than the year or years for which they are seeking relief;
5. The taxpayer was not a member of the same household as the spouse with whom they filed the joint return at any time during the 12 months preceding the date they filed for Innocent Spouse Relief; and
6. Based on all the facts and circumstances, it would be unfair to hold the taxpayer liable for the understatement or underpayment of tax.
7. Taxpayers did not file their return with the intent to commit fraud;

Further, the DOR states that they will consider all the facts and circumstances to determine whether it is unfair to hold the taxpayer responsible for the understatement or underpayment of tax. Furthermore, they state that they will consider both positive and negative factors and weigh them appropriately.

Filing for Innocent Spouse Relief

The taxpayer must file an Innocent Spouse Request Election Packet. The taxpayer should be sure to fill out the forms in the packet that apply to their situation. Next, the taxpayer or their representative should mail the completed packet to:

PA Department of Revenue
Office of Taxpayers’ Rights Advocate,
LobbyStrawberry Square
Harrisburg, PA 17128.

Appeal Rights For Separation of Liability and Relief for Understatement

Taxpayers may appeal determinations of relief for understatement of tax and separation of liability.  Taxpayers must file a petition with the Board of Finance and Revenue within 90 days of the mailing date of the notice of final determination. Determinations of relief via income allocation cannot be appealed. Additionally, if the taxpayer has not received a determination from the Taxpayers’ Rights Advocate within six months after filing for relief, they may file a petition with the Board asking it to review the request.

Penalties and Interest

Concerning taxes owed, there are two penalties that a taxpayer should be mindful of. The first is the failure to file penalty. The DOR will assess the failure to file penalty when the taxpayer fails to submit his/her tax return by the due date, including extensions. The failure to file penalty is 5% of the tax due for each month (or part of a month) the return is late. The maximum penalty for late filing is 25% of the balance owed.

The second is the failure to pay penalty. The failure to pay penalty is 5% of the tax due.

Additionally, interest accrues for each month (or part of a month) that a delinquent tax goes unpaid at a rate of 6% (March 2019).

As one can see, these penalties can become very steep. Therefore, even if a taxpayer is unable to pay the tax due they should strive to file their income tax return on time (and make a partial payment, if possible) to avoid or reduce the impact of these penalty and interest assessments.

Penalty Abatement

Pennsylvania allows taxpayers to appeal penalty and interest assessments by filing a petition to the Board of Appeals. Taxpayers will need to complete a petition form for submitting a penalty appeal request with the Board.

The taxpayer should file the petition online through the Board’s website. However, the petition form provides options for mailing or faxing the petition.

Alternative Options The Taxpayer May Consider

Challenge the Assessment/Request for Compromise

If the taxpayer has a proposed assessment for additional income tax due as a result of a State audit, they can appeal the proposed assessment to the Board of Appeals. The taxpayer should file their petition online through the Board’s website.

At this stage, taxpayers may also file a petition seeking a compromise of the taxes. The Board states that they will consider granting compromises in situations where the liability is in doubt and/or it promotes effective tax administration.

If the taxpayer does not resolve the issue with the Board of Appeals, the taxpayer may appeal their decision to the Board of Finance and Revenue (except compromise requests).

Bankruptcy

Taxpayers may want to consider this option if they have significant personal liability in addition to their taxes owed. In some situations, a taxpayer can discharge taxes through bankruptcy. However, rules and various criteria apply. Taxpayers should seek the advice of an experienced tax and bankruptcy attorney if they want to pursue this option.

The Pennsylvania Tax Amnesty Program

Pennsylvania has had many tax amnesty programs. Recently, this program ended on June 19, 2017. Any delinquent taxpayer should utilize this type of tax program if the State uses it in the future.

This program was for all taxes owed to the State that are administered by the DOR. For taxpayers to participate, they are required to file an online Amnesty Return, file all delinquent tax returns and make the necessary payments within the Amnesty Period. If the taxpayer completed those requirements, then the DOR would waive all penalties, collection and lien fees, and ½ of the interest otherwise due.

Appeal Rights

As discussed herein, the DOR has a Board of Appeals that was established as a unit within the DOR to be responsible for the review of appeals by taxpayers. However, in most instances, taxpayer appeals are limited to timely appeals of proposed assessments and the penalty and interest appeals.

Alternatively, there are a few practical tips that the taxpayer, or their representative, should follow to reach a reasonable resolution. First, do not be afraid to escalate contentious issues to a supervisor within the DOR. Often, a fresh set of eyes and the authority and experience of a supervisor can help resolve the tax issue amicably.

Second, if you believe that your case manager is not following Pennsylvania law, or discriminating against you, file a request for assistance with the Taxpayers’ Rights Advocate. The Office of Taxpayers’ Rights Advocate can help taxpayers resolve some of the following issues:

• An issue with, or action by, the DOR that has not been resolved by normal, established procedures.
• A delay of more than 180 days
• The DOR failed to provide a response or resolution by the date promised.
• DOR actions that will cause a substantial hardship.

For more information, visit the Taxpayers’ Right Advocate page of the DOR website.

PA Tax Lien Releases

The DOR will only release a tax lien after they have received confirmation the taxpayer has paid their tax liabilities in full. The DOR states that this process usually takes approximately 45 days.

In conclusion, Pennsylvania is not hindered by a statute of limitations to collect past due liabilities. Additionally, the penalty, interest, and collection fees system results in reasonable taxes owed ballooning into a crippling liability. Therefore, taxpayers should consult with a tax professional that has experience with Pennsylvania as soon as these problems arise. They can help determine which course of action is most appropriate for their situation.

Disclaimer: Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific advice regarding your tax situation, contact a licensed tax professional or tax attorney.