TAX DEBT RELIEF OPTIONS – Tennessee Department of REvenue

M&M Financial has been successfully resolving back tax liabilities for small businesses and individuals in Tennessee since 2006 and nationwide since 2005.  We deal with the IRS and State taxing authorities, so you do not have to!

If you or your business owe the Tennessee Department of Revenue back-taxes we recommend first reading your Taxpayer Bill of Rights.

Below is some information that will help you start resolving your state tax liabilities.  If you have questions and would like to talk to a licensed Tax Resolution Specialist please do not hesitate to call us at 866-487-5624.


The best way for many to satisfy a TN-DOR back-tax debt is with a formal Installment Payment Plan.  The easiest way to find out if you qualify for one, is to log on to your Tennessee Taxpayer Access Point (TNTAP) account and request it.

Payment Plan terms are typically between 2 and 60 months, and - 
  • Payments must be at least $50/mth
  • Payments must be taken direct debit from your bank account  

Be prepared to to complete financial statement forms to support your ability (or inability) to make monthly payments.  You can also expect a tax lien to be filed against you.

As always, you will need to be in current tax compliance with your TN-DOR responsibilities to qualify for an Installment Payment Agreement.  You should also be prepared to sign a waiver authorizing the release of documents from your financial institution or bank.  

Quick Tip:  It’s a good idea to set up a payment plan on a Tennessee tax liability right away.  This will prevent enforced collection actions such as bank levies and wage garnishments!


Offer in Compromise

TN-DOR does have an Offer in Compromise program.  

This is typically not a good resolution strategy for an operating business trying settle its tax debt (contact us to find out why) but may be a good option for an individual taxpayer.  

Good candidates for an Offer typically don’t have the ability to make a monthly payment and have little or no equity in assets, such as a home.  If you meet these criteria, you may qualify for the Offer.  The TN-DOR will expect you to offer 60 times your net discretionary income plus any usable equity in assets.  

Quick Tip:  Submitting a Tennessee Offer in Compromise will not stop enforced collection actions such as bank levies or wage garnishments while being considered for acceptance.  Contact us to find out how to solve this problem.

Penalty Relief

TN-DOR may be willing to abate penalties assessed to a tax liability.  However, to be eligible for penalty relief you will need meet the conditions below.  According to the state’s Petition for Waiver of Penalty form -

A penalty can be waived if it is determined that the tax delinquency or deficiency is the result of good and reasonable cause. 
Good and reasonable cause may include a good filing history for at least the prior two years. 
The failure to file or pay cannot be a result of gross negligence or willful disregard of the law (see Tenn. Code Ann. § 67-1-803).


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

page last reviewed 01/16/2024

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