Guide to Resolving Delaware Back Taxes & Other Tax Problems
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In the state of Delaware, individual and business tax filings are regulated by the Revenue Division of the Department of Finance. The Revenue Division reviews tax returns for errors, issues refunds and investigates situations involving the potential underpayment of taxes.
If you’ve received a notice from the Delaware Revenue Division advising you that you owe back taxes, you need to know what your payment options are. Delaware taxpayers can seek relief by making regular payments through an Installment Agreement or make an Offer in Compromise (OIC) to settle their tax bill for less.
Making Installment Payments
If you have the means to pay your Delaware back taxes but just need more time to do so, you can negotiate an installment agreement with the Department of Revenue. The length of your payment plan is generally determined by the amount of taxes you owe. If you can’t pay your entire tax bill at once, you should call the collections office at (302) 577-8586 to discuss your options.
You can also send a written request for an installment plan to the Department of Revenue. Written requests should include a copy of your tax bill, your name, taxpayer identification number and the tax period for which you owe. You may be asked to complete a Collection Information Statement, which includes information about your income, assets and expenses. The DOR will use the information you provide to determine how much your monthly payments will be under the installment plan.
Delaware Offer in Compromise (OIC)
In cases where paying off the tax debt is hindered by accruing interest and penalties, Delaware taxpayers may have the option of making an Offer in Compromise (OIC). If the Department of Revenue agrees to an Offer in Compromise, you can settle the tax debt for less than the full balance. To file an Offer in Compromise you must send a written request asking for a reduction in the penalties and interest on your account. The request should be addressed to the attention of your account manager and submitted to the Department of Revenue, located at 820 N. French Street, Wilmington DE 19801.
The DOR may ask you to complete and submit a collection information statement. In addition, you may need to provide additional documentation relating to your federal tax return. It typically takes several months for the Department of Revenue to make a decision regarding your offer
Note: As of September 2012, the Department of Revenue is revising the Compromise Procedures and no new offers are being accepted until this process is completed.
If You Fail to Pay
If you do nothing to resolve your Delaware back tax situation, the Department of Revenue could pursue any or all of the following actions against you:
- Filing a Notice of Judgment
- Serving a Notice of Warrant
- Seizing your personal property, real estate or business property
- Notify payers of your interest and dividend income to begin backup withholding
- Assess a 100% penalty against you if you owe withholding taxes
In the short term, you could be subject to wage garnishment or a bank account levy to satisfy the tax debt. In the long-term, any future tax refunds owed to you could be seized by the DOR and your credit rating will suffer until the judgment has been removed.
For Additional Tax Assistance
If you have questions about how to resolve your tax situation, you can contact the Delaware Department of Revenue at the phone numbers listed below:
- Personal Income Tax Assistance: (302) 577-8200
- Business Tax Assistance: (302) 577-8205
- Collections/Account Management: (302) 577-8785
- Installments: (302) 577-8586
All written requests may be sent to:
Delaware Division of Revenue
820 N. French Street
Wilmington DE 19801
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