Guide to Settling & Resolving Ohio Back Tax Problems
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When you owe unpaid or unfiled federal taxes, it’s no surprise that you can expect a call from the Internal Revenue Service. At the state level, it’s up to individual state tax agencies to collect outstanding tax obligations. In Ohio, the Department of Taxation is responsible for processing tax returns, issuing refunds and notifying residents when they have an unpaid tax debt. If you owe back taxes in the state of Ohio, you need to know what your options are for resolving the debt.
Establishing an Ohio Payment Agreement
If you owe federal taxes, you may have the option of establishing an installment agreement to pay off the debt over time. In the state of Ohio, the Department of Taxation is not legally authorized to approve any type of payment plan. You can still make partial payments towards your outstanding balance; however, this does not stop penalties and interest from accruing. It also doesn’t prevent the Department of Taxation from referring your account for collection.
In Ohio, the Attorney General is responsible for collecting unpaid debts owed to the state. Once your account is sent collection, the Attorney General will send you a notice regarding the tax debt. You can then request an installment agreement. In Ohio, payment agreements are granted for no more than one year. In order to set up a payment plan, you’ll be required to meet with a representative from the Attorney General’s Office and you’ll have to sign a contract outlining the repayment terms.
Ohio Offer in Compromise
When the amount of your tax debt is more than you believe you can reasonably pay off, it may be beneficial to consider an Offer in Compromise. An Offer in Compromise means that you pay the Department of Taxation a lump sum amount to satisfy the tax debt and the remaining balance is forgiven. Generally, you’re eligible to ask for an Offer in Compromise if any of the following three conditions apply:
- You have a severe economic hardship that prevents you from the tax bill.
- You do not believe you’re liable for the full amount owed.
- There’s a significant likelihood that if the back taxes owed were collected, the amount would be subject to refund under state law.
In order to apply, you’ll need to complete an Offer in Compromise form and submit it to the Attorney General’s Office. You’ll need to provide information about the type and amount of tax owed, the reason why you’re requesting the compromise agreement and information about your current income and assets. You’ll also need to provide documentation, such as bank statements or tax records, to support claim. The completed application can be mailed to:
Office of the Attorney General
Collection Enforcement Section
Offer in Compromise Program
150 East Gay Street, 21st Floor
Columbus, OH 43215
If your offer is accepted, you’ll have 60 days to make your payment to the Attorney General’s Office.
Penalties automatically apply to any unpaid or unfiled taxes owed to the Ohio Department of Taxation. These penalties can only be reduced by asking for a penalty abatement. According to the Department of Taxation website, a request for abatement will only be granted “if unique circumstances exist” and in most cases, only a partial penalty abatement will be approved.
If You Have Additional Tax Questions
Ohio residents should use the following telephone numbers and addresses to contact the Department of Taxation regarding a back tax issue.
Income Tax Assessments: (888) 297-2911
Request Forms: (800) 282-1782
Ohio Department of Taxation
P.O. Box 530
Columbus, OH 43216-0530
You can also contact the Attorney General’s Office by calling (800) 282-0515
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