TAX DEBT RELIEF OPTIONS – North CArolina Department of Revenue


M&M Financial has been fixing back-tax problems nationwide since 2005 and representing clients before the state of North Carolina going back to 2009.  We deal with the IRS and State taxing authorities, so you do not have to!

Get started learning about the North Carolina Department of Revenue Collections Process from the state’s website.

Below is some information that will help you on your way to resolving your state tax liabilities.  If you have questions, do not hesitate to call us at 866-487-5624.


NC-DOR PAYMENT PLANS TO RESOLVE BACK TAXES


INSTALLMENT AGREEMENTS FOR INDIVIDUALS

NC-DOR has standard guidelines regarding monthly Installment Agreements to satisfy delinquent taxes.  Taxpayers that owe Personal Income Tax can typically set up a Installment Agreement online via NC-DOR eServices, in person or by mail.  Depending on the amount of tax you owe, NC-DOR will allow 15, 30, 40 or up to 50-month Installment Agreements.  Before you hire professional representation, we recommend first contacting the NC-DOR directly to request your a monthly payment.

INSTALLMENT AGREEMENTS FOR BUSINESSES

If your business owes North Carolina Sales Tax, Withholding Tax or Income Tax the standard Installment Agreement term is 12 months regardless of the amount of taxes owed.  If your business needs more than a year to pay its tax debt, then you may be granted an extended term Installment Agreement with a manager’s approval.  You will be required to prepare and submit – 
  • Collection Information Statement for Individuals (Form RO-1062), and 
  • Collection Information Statement for Business (Form RO-1063) 
Unfortunately, North Carolina will not take your word for it.   Your completed financial statement forms should support your inability to pay the tax liability within one year.
 

REDUCE YOUR NC-DOR TAX DEBT


Offer in Compromise


North Carolina Department of Revenue does have an Offer in Compromise program for qualifying taxpayers to settle for a lesser amount.  It can be a great option for individuals that owe personal Income tax, but not so good for an operating business.  NC-DOR is less likely accept an Offer for an operating business, in part, because it doesn’t want to give any businesses a reason or incentive to not pay its required Withholding tax or Sales & Use tax obligations.  

If you are thinking about submitting an Offer in Compromise to resolve your personal tax debt, here are some fundamental guidelines that you need to know before you submit your Offer:
  • All required tax returns must be filed and current tax payments must be made on time.
  • You cannot just offer NC-DOR any amount you feel is reasonable and you cannot offer $0.  Your OIC must be properly calculated according to the NC-DOR standards. 
  • You must pay a 20% non-refundable down payment of your total Offer amount.  In some cases the down payment requirement can be waived.  But, you'll have to prove that you cannot afford to make it.

Penalty Relief


North Carolina Department of Revenue charges penalties on tax liabilities to encourage compliance.  The penalties charged are punitive in nature and may be removed if you had a qualifying hardship that caused your tax accrual.  When submitting your penalty abatement request you will need to use form NC-5500 Request to Waive Penalties.  The reasons that qualify for penalty relief consideration are listed in section 3 of the form.  

            You may qualify for penalty relief if you’ve experienced: 
  • Death of a taxpayer or immediate family member, 
  • Serious/sudden illness of taxpayer or immediate family member, 
  • Natural disaster, 
  • Good compliance history
NC-DOR typically will not grant penalty relief on Sales Tax liabilities.  

TAX RESOLUTION CASE EXAMPLES


The North Carolina Department of Revenue has some flexibility when it comes to back tax liabilities.  Each case varies based on factors such as compliance history, type of tax owed and total amount past due.  Here are some case examples in your area negotiated by M&M.


page last reviewed 1/4/2018

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