Overview of MS State Tax Options for Back Taxes
The Mississippi Department of Revenue (MS DOR) is primarily responsible for collecting tax revenues that help fund state and local governments. The Department also overlooks titling and registration of motor vehicles, enforces the state’s Prohibition and Local Option Law, and operates as a wholesale distributor of alcoholic beverages. The agency also overlooks property tax assessments across the state to make certain of uniform appraisal and valuation of properties within municipalities and counties.
Like the IRS and many states, Mississippi provides a framework for struggling taxpayers to resolve major tax state problems. Below we provide an overview of some of those options that the Mississippi DOR offers for MS individuals and entities needing tax relief. Although the options below do not pertain to all taxpayers, nor are they exhaustive, they serve as a guide.
Mississippi Tax Payment Plan
If a taxpayer cannot pay off Mississippi state in one payment due to financial difficulties, the MS DOR, just like the IRS, allows taxpayers to pay off tax liabilities over a series of monthly payments. Technically, the term used for a payment plan is called an installment agreement because essentially the taxpayer pays off their tax balance (including penalties and interest) over a series of installment payments. Payment plans are generally 12-24 months and require manager approval. The time frame or duration of the installment agreement can be longer than 12-24 months depending upon whether the taxpayer has an already approved IRS installment agreement. You can read more details on the Mississippi DOR’s installment agreement by visiting this page.
The Mississippi DOR doesn’t generally have formal penalty abatement guidelines like the IRS provides. However, in certain circumstances, if the taxpayer agrees to make a lump sum payment on taxes owed, the Department will abate some penalties. For example, if the taxpayer owes $5,000 which includes penalties, the state may agree to a lower amount if the taxpayer can make the payment in full.
Offer in Compromise
The Mississippi DOR does provide an Offer in Compromise (OIC) option for taxpayers overwhelmed by state tax liabilities. In fact, an OIC can be a plausible option for those who cannot discharge certain tax liabilities in bankruptcy or for those who may never be able to pay off their state tax liabilities. Mississippi does not offer an OIC for doubt as to liability and instead must appeal or follow the informal review process. The Commissioner of Revenue determines whether to recommend accepting an OIC to the governor. Because filing for an OIC is cumbersome, it is recommended that taxpayers leverage the experience of tax professionals such as an attorney, CPA, or EA. You can read more about the Mississippi Offer in Compromise program by visiting this page.
Appealing a DOR Decision
If the taxpayer disagrees with the amount of taxes due, they can always dispute the assessment of taxes, a penalty, interest, and other MS DOR actions within 60 days of the assessment or notice. Other actions taxpayers can dispute include audit results, refund denials, revocation or suspension of permits, and more. Taxpayers need to complete the Review Board Appeal Petition form and send it to the address at the bottom of the form. Alternatively, taxpayers can also file an appeal with the Board of Tax Appeals, which is an independent "quasi-judicial" entity consisting of three members appointed by the Governor.
Bankruptcy is an option for many taxpayers, but it generally is expensive. Bankruptcy generally is a last resort, especially if a taxpayer becomes solely burdened by tax liabilities. In other words, in many cases if a taxpayer owes taxes they cannot afford to pay but also has insurmountable personal financial liabilities, bankruptcy can make sense. Taxpayers should always reach out to a Bankruptcy attorney if they face tax problems.
To find a tax professional that has experience addressing Mississippi state tax problems, consider doing a search from our homepage or visiting this page.