When faced with Wisconsin back taxes or unpaid Wisconsin tax liabilities, realize there are tax relief mechanisms in place to help you file, pay, and/or settle tax liabilities. Generally, if one can’t file on time, a taxpayer can file for a tax extension. The Wisconsin Department of Revenue will also work with an individual if they cannot pay in full. If tax problems are ignored, tax liens and tax levies can result (wage garnishment, bank levies, asset seizures etc). Find out below important facts about dealing with the WI Department of Revenue, and key contact information. If you need a professional to help you, fill out the free consultation form on your right.
If you cannot afford to pay in full, always file a tax return anyway as generally, penalties for not filing are much greater than not paying. If you are unable to pay all of your WI taxes off at once, the Wisconsin Department of Revenue offers a payment plan which will allow you to pay off your taxes over time. The State of Wisconsin Department of Revenue will charge you $20 if your payment plan request is accepted and generally outstanding tax liabilities will be hit with an initial 6.5% fee on the outstanding balance or a minimum of $35 dollars if you cannot pay by the date indicated on your “Notice of Amount Due” notice.
You will need to fill out form A-771, which can be submitted electronically or mailed. Before requesting a payment plan though, make sure all of your tax returns that are due have been filed. It is always in your best interest to pay off a payment plan or outstanding tax balance as soon as possible as penalties and interest (generally 18%! per year) will make you end up paying more than you originally owed. After you make your request, the state will provide you a confirmation later on whether they accept your payment agreement a few days later and will let you know if you need to pay more each month or if they need more information.
Generally, if you owe less than $10,000 the Wisconsin Department of Revenue may or may not put a tax lien on your property (delinquent tax warrant). A tax lien negatively impacts your credit, adds additional charges to your balance, and the lien becomes public. To find out more in general about tax liens click here. However, if you owe $10,000 in State WI taxes, the state will generally file a tax lien on your property.
A Wisconsin Offer In Compromise is similar to what the IRS offers which you can read more about here. If you are unable to pay the minimum monthly payment amount on a payment plan that is required by the Wisconsin Department of Revenue because of your financial situation, you may petition for a Compromise of Taxes owed whether you are an individual or business (corporation, partnership, llc). This is how you can settle for less than you owe.
If you are an individual you will need to complete FORM A-212 or if you are a corporation you will need to complete Form A-213 and send it to your agent or the address listed on the form. In form A-212, you will be required to show your income, assets, and liabilities with supporting documentation. If you make an offer (generally less than what is owed) and the State of Wisconsin feels this offer is what they would reasonably collect based upon your current and projected financial situation, then most likely your offer will be accepted and you will have 10 days from the acceptance date to pay or pay in accordance with your payment schedule. They also may reject your offer and counteroffer you. However, realize these conditions must be met:
If you have a tax lien on your property already or are experiencing levies or attachments, an OIC acceptance will not guarantee these will cease. However, if an OIC is accepted and payment is satisfied, then all outstanding tax warrants will cease.
If you fail to respond to a delinquent tax liability notification you may receive a Notice of Information Hearing which is a collection notice from a revenue agent assigned to resolve your tax liabilities. If notifications are ignored, the Wisconsin Department of Revenue may levy your bank account, which means they notify your bank and can legally garnish the funds in your account to satisfy unpaid taxes. Alternatively, they may pursue a wage certification or wage levy which means that can dock your pay in order to recoup taxes owed overtime. Lastly, if you owe more than $5,000 including taxes, interest, and penalties, you could end up on the wall of shame of delinquent taxpayers that is publicly posted by the State unless of course you entered into an Installment Agreement, submitted an OIC, or filed for bankruptcy.
If you owe back taxes, you probably know by now or will find out soon that the Wisconsin Department of Revenue means business. Just like Federal tax liabilities, not resolving state tax liabilities whether you are a business or individual will result in more stress, bigger liabilities, and problems that you are better off addressing the situation sooner rather than later. Filing for an Installment Agreement or Offer In Compromise can be done without the help of a tax professional, but having a tax attorney or CPA on your side in many cases works to your advantage. Use the form on the right to a free tax consultation today.
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