Most taxpayers, especially small business owners, do their best to always comply with the law. The reality is life happens, and sometimes you fall behind.  They may have simply made a mistake or had issues with their business software. Others faced unforeseen events, such as family emergencies or health problems. For taxpayers such as these, the Department of Revenue offers payment plans to help get back on track by allowing installment payments on past-due taxes rather than requiring the entire amount at once.

Unfortunately, because penalties continue to accrue during a taxpayer’s participation in a payment plan, it can be challenging to catch up. Individuals and local businesses may feel as though resolving their tax liability becomes more and more out of reach with each passing month.

That is why I will soon introduce legislation to freeze penalties and fees on past-due taxes during a taxpayer’s participation in a duly authorized payment plan, if they stay on schedule.  Make no mistake, past due amounts accruing interest add up fast and it’s worth avoiding in the first place.  But I feel as long as you stay current on the agreed to payment amounts, at least that is a good enough faith effort – on an agreed to pathway toward solvency – to deserve freezing any further penalties or fees on the late amount.  
My legislation would also provide that entering into such a payment plan does not remove the individual’s right to appeal their past-due tax liability.

Most taxpayers genuinely want to do the right thing. Please join me in adding one more tool to our toolbox to help them get back on track.