Georgia State Tax Resolution Options for Taxes Owed
Common GA Tax Resolutions
The Georgia Department of Revenue (the “DOR”) is responsible for collecting all the State’s taxes, including the income tax.
Once a tax liability becomes due through a taxpayer filing a tax return with no payment, or an audit assessment, the DOR will mail an Official Assessment. The taxpayer has 30 days to either pay or appeal the Official Assessment. If the taxpayer does not pay or appeal within 30 days, then the DOR will issue a State Tax Execution and impose a 20% collection fee. The DOR records the State Tax Execution in the county public records – which acts as a lien on the taxpayer’s property. Further, after the issuance of a State Tax Execution, the DOR may begin enforced collection actions.
Enforced collection actions include garnishment, the seizure, and sale of personal property, a levy placed on bank accounts, Treasury Refund Offsets (seizure of federal tax refunds), and the use of collection agencies. Therefore, it is essential for taxpayers with delinquent taxes to attempt to resolve their outstanding liabilities.
Taxpayers who owe delinquent income taxes to the State of Georgia have a few main options available to reach a reasonable resolution. Although not exhaustive, here a few options:
Payment Agreement (Installment Agreement)
- A payment agreement/installment agreement is an arrangement where the taxpayer reaches a deal with the DOR to make monthly payments until they pay in full the past due tax liability. Generally, the DOR will offer payment plans or installment agreements for up to 60 months. In other words, taxpayers must pay off the balance, including interest and penalties within 60 months.
- A Georgia Offer-in-Compromise is an agreement where the taxpayer agrees to pay a lump sum in settlement of the entire tax liability. The program offered by the DOR is very similar to the Offer In Compromise program provided by the IRS. Not all taxpayers meet eligibility standards as the DOR has specific requirements that the taxpayer must meet. Taxpayers in many cases can end up settling their tax liabilities for less than they owe.
- Penalty abatement is a request asking the DOR to waive some, or all, of the assessed tax penalties. In similarity to the IRS, “reasonable cause” must exist. In other words, willful neglect or disregard of law does not constitute reasonable cause. Reasonable cause exists when circumstances outside of the taxpayer’s control lead to non-compliance.
Alternative Options That May Be Available
Innocent Spouse Relief
The State of Georgia offers Relief from Joint Liability for certain taxpayers who filed joint returns. Innocent Spouse Relief is available in certain circumstances to taxpayers whose taxes owed attributable to their spouse. Taxpayers who file jointly are both responsible for the joint tax liability. Therefore, in certain situations, the DOR may relieve one taxpayer on the joint tax return if he or she is not responsible for failing to pay or report the tax due on a joint income tax return.
A taxpayer must meet the following conditions for Innocent Spouse Relief eligibility:
- A joint tax return that resulted in additional tax liabilities because the income of one person was reported incorrectly or not reported at all
- The individual seeking relief can prove he or she had no knowledge and reason to know income was not reported or erroneously reported; and
- Under the circumstances, it is unfair to hold the person accountable for tax on the omitted or incorrectly reported income.
- Tax taxpayer has already obtained relief from a Federal taxes owed under Section 6015 of the Internal Revenue Code
The DOR generally will not consider a person for Innocent Spouse Relief unless the individual was treated as an Innocent Spouse under IRS guidelines. Therefore, to request Innocent Spouse Relief taxpayers are instructed to contact the DOR at 877-423-6711, and the information needed to submit a relief request will be given to them. The taxpayer must provide documentation establishing the IRS granted relief for the tax period in question.
As discussed herein, the taxpayer may appeal Proposed Assessments via the internal DOR protest process. Further, taxpayers may appeal Official Assessments and State Tax Liens to the GTT. The GTT generally has jurisdiction over appeals of tax matters involving the DOR. It includes the authority to review decisions of the DOR concerning all of Georgia’s taxes. Taxpayers can appeal further the decisions of the GTT to a local Georgia Superior court. Furthermore, under certain circumstances, taxpayers may appeal directly to a Georgia Superior court.
Challenge the Assessment/State Tax Execution
Proposed Assessments: If the taxpayer has a proposed assessment for additional income tax due, they may file a protest with the DOR within 30 days from the date of the proposed assessment. Taxpayers can request this protest online via their Georgia Tax Center accounts or by mail (complete the following form). Taxpayers cannot appeal proposed assessments to the Georgia Tax Tribunal.
Official Assessments: Official assessments can be appealed to the Georgia Tax Tribunal (GTT) or in a local Georgia Superior court within 30 days from the issue date on the official assessment notice.
State Tax Execution: As discussed above, if a taxpayer does not appeal or pay an official assessment within the 30 days the DOR may issue a state tax execution (a state tax lien). Taxpayers can appeal this action with either the GTT or in an appropriate Georgia Superior court.
Taxpayers can find more information regarding filing appeals with the GTT here. While taxpayers have the option to file in Georgia Superior court, there are particular requirements for doing so. Taxpayers considering this option should consult with an attorney.
The Georgia Voluntary Disclosure Agreements
The DOR has a Voluntary Disclosure Agreement (VDA) program designed for taxpayers who have had no contact by the DOR and have unfiled or underreported unpaid taxes. If these taxpayers come forward, they will usually receive a waiver of all penalties and an extended time limit to pay their back taxes. The DOR refers to this extended period as the “look-back period,” which DOR usually grants for three years.
Taxpayers who believe they qualify for this program should apply via mail or e-mail. Taxpayers can find more information on the application process and procedures for filing a VDA program application here.
Bankruptcy is not inexpensive. Taxpayers with substantial personal liabilities in addition to taxes owed may want to consider this option. Generally, taxpayers can discharge some state taxes owed through bankruptcy proceedings. Therefore, taxpayers should contact an experienced tax and bankruptcy attorney to pursue this option.
The Statute of Limitations (SOL)
A taxpayer should first determine their legal rights concerning Georgia law concerning the statute of limitation rules for the collection of unpaid taxes. In Georgia, the DOR has seven years from the date of assessment to file a lien if the assessment was issued before February 21, 2018. The DOR has five years from the date of assessment to file a tax lien if the assessment was issued on or after February 21, 2018. Once the DOR files a tax lien, they have ten years from that date to collect the unpaid taxes. The 10-year time clock may be tolled (paused) under certain circumstances. For example, when the taxpayer is in a Payment Agreement with the DOR or when the taxpayer has filed bankruptcy.
The DOR will only release a tax lien after they have received confirmation that the past due liability has been paid in full or satisfied via an approved Offer-in-Compromise payment. However, you may be able to get a partial release or a lien subordination. Check out our guide to GA tax liens to learn more.
As a useful tip, the taxpayer should not hesitate to raise disagreements to a supervisor within the DOR. Often, a different person and the authority and experience of a supervisor can help resolve tax issues amicably.
Additionally, Georgia has a Taxpayer Resolution Unit that serves to ensure that taxpayer rights are protected and that they receive timely and courteous service from the DOR. The Taxpayer Resolution Unit states that if all administrative options have been exhausted, they can help facilitate rapid and equitable resolution. Taxpayers can contact the Taxpayer Resolution Unit at [email protected].
Taxpayers have many options to resolve outstanding tax liabilities with the State of Georgia. As a result, taxpayers should resolve taxes owed sooner rather than later. The longer a taxpayer takes to resolve unpaid tax liabilities, the higher penalties and interest go. Therefore, taxpayers should consult with a tax professional that has experience with the Georgia Department of Revenue. A licensed tax professional can help taxpayers navigate possible options and find the most appropriate plan of action.
Disclaimer: The content on this website is for educational purposes only and does not serve as legal or tax advice. For specific help regarding your tax situation, contact a licensed tax professional or tax attorney.