Florida Department of Revenue Stipulated Tax Payment Agreement
If you owe taxes to the Florida Department of Revenue (DOR) and you cannot afford to pay your bill in full, you may be able to qualify for a payment plan. A payment plan lets you pay off your back taxes in monthly installments. In Florida, these arrangements are called stipulated time payment plans.
Obtaining a payment plan on Florida taxes can be complicated, but it is possible. Here is an overview of the essentials.
How to Qualify for a Tax Payment Plan in Florida
To qualify for a payment plan on Florida back taxes, you must prove to the state that you cannot afford to pay your tax bill in full. The state does not have a formal application for payment plans, but the state will likely require you to share details about your financial situation.
Although the requirements can vary, you may need to show the state your business's federal tax returns for the last three years, and you may also need to provide proof of income from the business's owners.
How Tax Payment Plans Work in Florida
In Florida, back tax payment plans can require up to a 25% downpayment. Then, you typically must pay off the balance in 12 months. For example, if you owe $10,000, you can make a $2,5000 downpayment and then pay $625 per month for 12 months until you have paid off the balance in full.
In some cases, the state may allow you to make payments for 12 months and renew the payment plan. To continue with the above example, imagine that you prove to the state that you can only afford to pay $300 per month. After making the $2500 downpayment and 12 months of $300 installments, you still owe $3,900 on your tax bill. The FL DOR may be willing to give you another 12-month interval to pay off that amount.
How to Apply for a Tax Payment Plan in Florida
The FL DOR does not have a set application process for payment plans. If you want to apply for a payment plan, you should contact the DOR directly. Unfortunately, however, calling and asking for a payment plan often leads to rejection. You may have better results if you apply in writing or work with a tax professional.
You may also visit one of the Florida local service centers to request a stipulated tax payment agreement in person.
Terms for Tax Payment Plans in Florida
Payment plan terms are established on a case by case basis, which the state will consider the following issues:
- The number of payments to be made.
- Frequency and due dates of payments.
- Amount of down payment.
- Amount of installment payments.
- How the payments will be applied to your tax liability.
The downpayment is based on your compliance history, the total amount due, and the financial information you provide to the DOR.
Appeals and Payment Plans
By entering into a payment plan, you agree that you owe the tax due. Once you start a payment plan, you cannot appeal or protest the tax. If you believe that you do not owe the amount shown on your account balance, you should contact a tax professional. You should not set up a payment plan.
Interest on Payment Plans
Interest will continue to accrue on your account when you have a payment plan. The state will not assess penalties on your account, and other collection activities will cease unless you default on the payment plan.
However, the jeopardy assessment rules still apply. The state also has the right to audit your account. If an audit shows that you owe more, you will be responsible for that amount, but you have the right to appeal if you disagree.
Defaulted Payment Plans
When you have a payment plan, you must stay compliant with tax reporting and payment obligations. If you don't file or pay tax as required, the FL DOR may consider you in default. You can also go into default if you miss an installment payment.
If you cannot afford to make a payment on time, reach out to the DOR and try to make arrangements. The agency may be willing to make an exception. In contrast, you will automatically go into default if you miss a payment without notifying the agency.
If you default on your tax payment plan, the department can issue a warrant or lien, tell your sheriff to levy (seize) your assets or implement a garnishment against you. The state can also revoke or suspend all licenses and permits issued by the FL DOR.
In the case of default, the state has the right to recover the entire outstanding tax liability plus attorney's fees.
Get Help Setting Up a Florida Payment Plan Today
Because the FL DOR doesn't explain how to apply for a payment plan on its website, this process can be confusing and complicated for taxpayers. If you owe sales tax, corporate tax, or any other back taxes in Florida, you should contact a tax pro who has experience with the FL DOR. They can guide you through the process and help you find the best resolution for your tax issues.
Disclaimer: The content on this website is for educational purposes only. It does not serve as legal or tax advice. For specific help regarding your tax situation, contact a licensed tax professional or tax attorney.