State Tax Resolution Specialists
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State Tax Resolution

A common misconception is that state collections actions are less serious than federal collections actions. Contrary to popular belief, collections actions taken by states to claim unpaid debt are more aggressive than those taken by the IRS and can disrupt your daily life by preventing you from driving, working, or accessing your direct deposit paycheck. When faced with state tax collections actions, it is important to consult an experienced tax professional as soon as possible so that you can avoid the serious consequences of unpaid state tax debt.

The consequences of unpaid state tax debt

State taxing authorities must be taken very seriously, as they can be extremely aggressive. Some of their collection remedies are permanent and cannot be changed once they are implemented.

There are four types of state taxes that can result in collections actions if unpaid. They are:

  • Personal income tax
  • Business sales & use tax
  • Unemployment tax
  • Business equipment tax

Regardless of the type of state taxes you owe, the government will act quickly to begin collections actions and begin punitive measures to further pressure you to pay off your tax debt. Time is of the essence, so it’s critical to enlist the help of a professional who can begin working on the issue as quickly as possible, before viable options are eliminated.

Unresolved tax debt can lead to an array of serious consequences, including:

When faced with state tax debt, it is important to act quickly to resolve your debt before the government seizes your accounts. Because your options to resolve your debt vary widely by state, an experienced tax professional can help you navigate your state’s process before permanent collections actions are taken.

State tax relief solutions from the experts at Key Tax Group

When serious consequences are at stake, you need serious tax law representation. At Key Tax Group, we specialize in state tax resolution nationwide. As the premier tax law firm in the U.S., we are one of the very few firms that offer excellence in tax resolution services in every state. Our focus is simple: We protect our clients’ paychecks and savings from aggressive tax collections while helping them resolve their tax issues. For more information on how we can help you resolve your state tax debt, contact our office today.

Tax Resolution by State

Alabama
  • 12-month IA
  • Over 12 months requires financials
  • No offers in compromise (OIC)
  • Hardship is reviewed every 12 months; if the taxpayer cannot pay off the balance after 12 months, they must provide new financials to the state
  • The form is C41-E
  • The IA form must be mailed to Collection Services Division
  • Fax number: 334-242-8342
Arizona

Check with state.

Arkansas

Check with state.

California
  • If the tax debt is under $25,000, may go up to 60 months
  • Most IA are determined by agent
  • Cannot be in a current IA
  • Form 3567 must be filled out
  • Have hardship; it's reviewed every six months
  • State may request financials
Colorado
  • 36 month IA
  • Hardship must provide income and financials
  • State follows federal OIC; if IRS accepts OIC, so will state
Connecticut
  • If taxpayer owes less than $10,000, 12-month IA
  • If the state accepts OIC, it must be paid within 30 days
Delaware
  • 48-month IA
  • OIC will have a judgement placed
  • If OIC is approved, it may have to be paid in full or the state may accept payments (up to the reviewer)
Florida

Check with state.

Georgia
  • 60-month IA
  • Monthly payment must be at least $25 per month
  • Requires a $50 setup fee
  • Cannot be done over the phone
  • State IA form must be completed and mailed to the state
  • If OIC accepted, 60-month IA
  • Cannot fax or email state POAs; must be uploaded online
Idaho
  • Maximum IA 18 months; over 18 months requires financials and supporting documentation
  • OIC is a lump-sum Settlement Offer
  • Must complete a comprehensive, six-page online form
  • Two months income; three months bank statements
  • If state accepts offer, taxpayer has 10 days to pay state in full with certified funds
  • Hardship: Same form as settlement offer plus a letter explaining hardship; state will take a few weeks to approve
  • Contact Rebecca at Twin Falls office: phone 208-293-9043, fax 208-736-3043
Illinois

Check with state.

Indiana
  • IA requires 20% down
  • If $500 or less is owed, 12 month IA
  • If more than $500, 24 month IA
  • OIC goes to TPA; if legal action has been taken by the state, the TPA cannot stop it (levy, garnishment, or collections)
  • Hardship (terminal/critical illness in immediate family or if in financial ruin
  • If a warrant has been filed, taxpayer must prove that the warrant limits his ability to earn an income
Iowa

Check with state.

Kansas
  • 12-month IA, no tax lien
  • If more than 12 months, state makes the final length of IA tax lien will be filed and full financials are needed
Kentucky
  • 24-month IA without financials
  • Anything longer than 24 months requires financial statement
  • Offer in Settlement balance has to be more than $3,000 and requires a $500 payment with offer
  • Once bank levy has been issued, the state will not release
Louisiana
  • One of the hardest states
  • Will not release garnishments or bank levy
  • Six-month IA
  • $150 setup fee
  • If debt has gone to the Louisiana AG's office for collection and a garnishment is in place, we can request a reduction, but it requires financials and supporting documents
  • Financials and supporting documents should be faxed to 225-326-6593 or to the attention of Garnishment Reduction Request at 225-326-6594
  • It will be reviewed by an attorney, then we receive a call with a determination on whether they will reduce it and by how much
Maine

Check with state.

Maryland
  • 36-month IA
  • State will go up to 99 months if approved off financials; must prove severe financial hardship
  • Need copy of DL with POA
  • Comptroller of Maryland, Attn: Compliance, 110 Carroll Street, Room 100, Indianapolis, MD 21411
Massachusetts
  • 36-month IA
  • OIC is offer in settlement
Michigan
  • Six- to 24-month IA tax lien will be filed by state
  • OIC lump sum option 30 days or periodic payments five months tax lien will be filed by state
  • Taxpayer does not need to be compliant for IA with state
Minnesota
  • 24- to 36-month IA; more than 36 months requires financials
  • OIC one-time review if denied IA only option
  • Garnishment will not be released unless it is more than IA
  • Garnishment can be reduced if financials show hardship
  • Debt stays in house
  • Hardship requires two months' bank statements; two to four paystubs; list any and all medical expenses, IRS debt and living expenses
Mississippi
  • 12 months if debt is $75 to $3,000
  • Up to 60 months if over $3,000 but state has to approve length of IA
  • Taxpayer must be in an IA with IRS for the same years as taxes owed to state
  • OIC must be approved by IRS for the state to accept
Missouri
  • 12-month IA
  • Must not have defaulted on more than two previous IAs to qualify for IA with state
  • OIC must show income and financials
  • Garnishment reduction but must show income and full financials
Nebraska
  • 90-day IA; no form required
  • IA longer than 90 days form 27D state must approve the IA is EFT up to 24 month financials not required
  • OIC income and full financials required
  • Debt is sent out to collection agency if state has sent out three notices and debt is older than six months
Nevada

Check with state.

New Hampshire

Check with state.

New Jersey
  • 24-month IA
  • Must not have been in an IA for the last three years
  • Must be $1,000 or less
New Mexico

Check with state.

New York
  • 36 to 60 months; 36 months is normal
  • Warrants will be filed by state
  • First service income executions sent by the state is the IA form; it requires the taxpayer to pay 10% of gross income each payday
  • Second service income executions are sent to employer; it is a garnishment (may be released but not normal once in place)
  • State issues tax warrants because it allows state to collect for 20 years
  • Once levy is issued, the state will not release it
North Carolina
  • IAs $1,000 or less 15 months
  • $1,000 to $6,999 30 months
  • $7,000 to $49,000 40 months
  • $50,000 or more 50 months
  • OIC requires 20% at time of filing
  • Garnishment can be reduced not removed
  • Levies will not be removed once sent to bank
  • Business less than $7,000 six months
  • More than $7,000 no IA
North Dakota

Check with state.

Ohio
  • IA cannot be set up until the balance goes to AG office
  • IA is generally 12 months
  • Will require financials if more than 12 months based on ability to pay by taxpayer
  • May be sent to third-party collection agency
  • Third-party agency will garnish; very hard to get released
  • Third-party will levy banks also
  • OIC yes
Oklahoma
  • Three-month IA
  • Tax lien will be filed
  • 12-month IA hardship, requires income and financials
  • State will send to third-party collections who may garnish or levy; state will not
  • State does not have option for auto debit or online payments; mail-in payments only
  • Phone number for hardship: 405-522-1289
Oregon

Check with state.

Pennsylvania
  • Six- to 12-month IA
  • Six-month IA less likely for lien to be filed
  • 12-month IA tax lien will be filed
  • IA requires 20% down payment
  • Hardship requires financials and IA up to 24 months
  • State uses third-party collection agency after 150 days of debt owed
  • State will garnish but can be released with IA
  • Bank levy will be released with IA, but the state will take 25% to 100% if levy has been sent out
Rhode Island
  • No set terms of IA, but a down payment or half of the balance owed is required
  • State also requires income vs. expense statement which is attached to the IA form
  • The state will then set length of IA
  • OIC yes
South Carolina
  • IA up to $999 12 months
  • $1,000 to $4,999 24 months
  • $5,000 to $9,999 36 months
  • $10,000 or more 48 months
  • $45 fee for all IAs
  • No OIC; they have settlement offer, will require 433a
  • IA 12 to 24 months; state likes to keep it under 24 months; will go to 36 months but it requires financials
  • State prefers to do auto draft
  • They have OIC
  • The state uses third-party if they cannot collect
  • They will garnish once sent out will not release
  • They also levy bank accounts
  • Once it is in place, it stays
South Dakota

Check with state.

Tennessee

Check with state.

Texas

Check with state.

Utah

Check with state.

Vermont

Check with state.

Virginia
  • 24-month maximum IA
  • Hardship: They set up temporary IA for three to six months based on financials and supporting documents.
  • Payment is case-by-case basis during timeframe that the documents are being reviewed and will be free from collection enforcement until determination is made on what the terms of IA is established
  • OIC yes; the application for OIC needs to be completed for screening and then it becomes case-by-case basis
  • All can be faxed to 804-254-6112
Washington

Check with state.

West Virginia

Check with state.

Wisconsin

Check with state.

Wyoming

Check with state.