24

August

Information About State Tax Debt Relief

Different Forms But Similar Rules

If you have back tax debt with the IRS, chances are you also have back tax debt with the state government.

Adding back state tax debt on top of your IRS back tax debt is like adding insult to injury. Gone is the prospect of paying all of your back tax debt with a single check to the IRS. You’ll also have to pay off the state tax department as well and say goodbye to even more of your hard-earned money.

The basics of trying to get state tax debt relief are that state tax agencies follow rules and procedures that are similar to the IRS’s. The forms are different, though, so you’ll have to take note as to which ones to file. Also, deadlines might be different, so make sure to note those as well.

But not paying your state back tax debt can be bad for your professional life.

Attorneys in Oregon were on notice after one of their colleagues was suspended from practicing law after his back tax debt ran to roughly $400,000. This particular attorney was a tax delinquent who didn’t pay a variety of state and federal taxes for about 16 years.

The Oregon State Bar considered that level of tax delinquency to be “moral turpitude,” and if the state bar in Oregon thinks that way, chances are other state bars do, too.

Ramming up your state back tax debt can also lead to the suspension of your driver’s license.

That’s what state officials did in New York for those owing more than $10,000 in state tax debt.

Issues like driving and professional licensing are typically always regulated by state governments. So don’t be surprised if your state back tax debt impacts your driving or professional ability.

Also, it’s possible that having state back tax debt can impact you or your business’s ability to acquire state contracts.

State tax officials also try and shame tax debtors into paying their back tax debt.

California, Vermont, Massachusetts and Pennsylvania publish lists of tax debtors on state websites. If you have state tax debt and are looking to get a job, chances are a potential employer will learn about your name being on such a list when they investigate your background.

Having your name on a state tax delinquency list may lead potential investors to think twice if you’re looking for a capital injection. State tax debt may seem like a small problem, but there can be big consequences for you and your business.

If you have state tax debt, don’t ignore it. Better yet, work with a tax professional to get it resolved. After it’s resolved, you can start fresh and move on to your next venture.