Help to Resolve State Tax Debt
Is your state tax authority demanding payment in full—now? With the right help, you can find a tax resolution that works for you.
Need Fast State Tax Resolution?
If you’ve received a notice of taxes due from your state, you might be shocked at how quickly they are demanding payment.
That shock can turn to dismay if you are unable to pay the full amount all at once. It’s often difficult for people to understand and navigate rules for appeal or find alternatives to immediate payment. You can quickly feel left behind as the state collections process rolls forward.
A qualified tax professional understands the processes of every state—and can help you find the right tax resolution for your state and your situation.
Overwhelmed by State Collections Processes?
Tax Debt Help Is Available.
It’s important to understand that the IRS and state tax authorities don’t play by the same rules when it comes to tax debt collection. The IRS is bound by a complex bureaucratic process and must deal with very large volumes of cases. States also follow prescribed processes, but in many cases, the steps are streamlined to enable the state to collect quickly. As a result, taxpayers are often blind-sided.
State tax debt appeals processes don’t favor you.
When the IRS sends a final Notice of Intent to Levy, you have the right to request a Collection Due Process Hearing. Your case will be assigned to the IRS Appeals Office, and if you disagree with the Appeals determination, you can file a petition with the United States Tax Court—before paying the balance in most cases.
In contrast, at the state level, you might not have that option. For example, the State of California Franchise Tax Board (FTB) requires you to pay the full balance first; only then can you file a dispute through a court process if you disagree with their assessment.
It is possible to delay state tax collections if you act quickly. You may be able to:
- Request an extension to pay the tax due (often around 30 days)
- Request an informal installment agreement, which can provide relief if you can pay within a slightly extended time—typically 90 days
- File a formal protest to dispute the balance due
States can move aggressively to collect tax debt.
If you aren’t able to pay in those relatively short windows, many states will quickly move to collection measures.
- Levies on bank accounts, IRAs, and investment accounts
- Liens on personal assets
- Garnishment of tax refunds and money you earn
- In the most serious cases, suspension of state professional, occupational, or driver’s licenses
What You Need to Know:
Tax Relief Services to Resolve State Tax Debt
Just like the IRS, most states have tax resolution programs in place to help if you’re unable to pay the balance in full. The procedures for resolving your state tax debt differ from IRS processes—and also differ from state to state.
What if you have both state tax debt and IRS debt?
IRS and state tax debt often go hand in hand. However, you have to deal with them separately.
If you have both, you need to decide which is the more critical issue. Although the IRS debt might be a greater amount, your state may be quicker to move to collections.
For many individuals, it’s wise to first set up an agreement with the state. The benefit of prioritizing the state debt is twofold:
- You’ll avoid collections risks from the state.
- The IRS may view your payments to the state as an expense—which may put you in a better position for an Offer in Compromise for your federal taxes.
Engage tax relief services early to handle difficult appeals processes.
Some states offer straightforward options for dealing with your tax debt. Other states can be challenging to work with. If you live in a state that has shorter time frames and requires you to jump through more hoops, you may quickly be discouraged.
Consider one example: Both the State of California and the IRS evaluate whether you qualify for an Offer in Compromise agreement by determining the reasonable collection potential. However, the California Franchise Tax Board looks at not just whether you can pay now, but whether you might be able to pay in the future.
Putting off the issue doesn’t work—regardless of the state you live in. Professional tax relief services can reduce the stress and frustration of finding a resolution.
You DO have options for tax debt relief.
Every state is a little different, but every state that collects income taxes has programs to enable taxpayers to resolve their tax debt. A qualified tax professional can help you understand your situation and provide a realistic assessment of the options available to you. Your tax professional can work with you to determine whether you qualify for solutions such as:
- Installment Agreement—To reduce the hardship of paying your tax debt, your tax professional can help you set up affordable monthly payments to pay all or part of the debt.
- Offer in Compromise—Under specific qualifying circumstances, the state may accept an offer to pay less than the full amount of the debt.
- Discharged and Extinguished Debts—Similar to the IRS Currently Not Collectible Status, if the state determines that you have no means to pay the amount due, the debt can be discharged. This step doesn’t remove your responsibility to pay, but it does stop collections until after the statute of limitations for the state has expired. The responsibility to pay is removed only when a debt is extinguished.
Get professional tax debt services to resolve the issue quickly.
When pursuing any of your tax resolution options, it’s important to work with a licensed tax professional who is qualified to represent you both at the federal level and in all 50 states.
We’ve worked with tax authorities for over 30 years.
We know what to do, who to contact, and how to get things resolved.
We Have Tax Debt Help Down to a Science
For over three decades people have turned to TaxAudit when they have tax issues. We speak the language of the IRS and state tax authorities, we understand their processes, and we implement solutions through a proven approach that gets results.
Because we know what it will take to resolve your issue, we provide a fixed-price quote so that you can get your finances back on track. No surprises.
