Should you live in the State of Utah and find that you don’t have the money to pay your liabilities, finding a tax attorney should be the first thing that you do. They will be able to offer you all the advice that you need specifically for the State of Utah.
State taxes consist of sales tax, income tax, and payroll tax. However, some taxpayers find themselves unable to pay their liabilities. How this issue can be resolved is handled differently depending on the State where you live. Therefore, if you find yourself a tax attorney you can be confident that they will know the laws in your State.
States offer taxpayers programmes which can help them to “wipe the slate clean” of their liabilities. The specific programme that you may be offered will depend on the State where you live, the type of tax that you owe, and whether or not you gave the information voluntarily.
Your Tax Attorney in Utah Can Advise You of the Best Programme
This is a plan that you can contribute to, to repay your back taxes, penalties and interest. There are a couple of things that your tax attorney should tell you about before applying for a payment plan though. Firstly, interest will still be charged on the outstanding balance until the full amount is repaid. Secondly, in some States they may issue a tax lien or warrant on the taxpayer. This will mean that they will be unable to borrow more money, which may affect their business dealings.
Payment plans usually run from twelve to eighteen months. Depending on the length of the payment plan that you apply for will determine how much financial information that the State requests. Not just on business finances, but sometimes also those of the business owners. It is typically found that the longer the length of the plan, the more information will need to be disclosed.
Voluntary Disclosure Agreement (VDA)
A VDA is offered to taxpayers who have voluntarily declared previous year tax liabilities as being outstanding. On many occasions the State isn’t aware of the debt. The State can then limit the tax amount owed to the previous three to five years. They also usually write off any penalties, and some of the interest that may be due.
This is of obvious benefit to the taxpayer as they see their debt reduced considerably. The State also benefits from the arrangement as a VDA generates revenue. So, a VDA is considered a “win win” for parties on both sides.
However, a VDA is only available if the business has not already been asked to audit their accounts. Meaning that if this is the option that your tax attorney suggests, you need to set the process in motion as soon as possible.
States offer taxpayers an amnesty with similar terms to a VDA. So then taxpayers can findtheir outstanding liabilities resolved, penalties cleared and interest reduced by 50%. The exact terms of an amnesty will depend on the State where you live, so it is best to speak with a tax attorney that works in your area.
Offer in Compromise (OC)
An OC is usually set up by the State should they accept the figure proposed by the taxpayer. This will be a sum lower than the original tax liability that is owed. The State is not obligated to agree to an OC however, so speaking to a tax attorney may be wise. The taxpayer will be required to meet one of three conditions before their proposal is even considered.
- They can show that their past liability may be incorrect.
- That there is no way at all that the full outstanding debt can be collected.
- By having to repay the full liability figure will cause the taxpayer significant hardship.
So, if you find a tax attorney in Utah you also may be able to resolve your past liabilities and put your mind at ease.