What if I fall behind in paying my business taxes?
August 6, 2007
In this installment of our summer business-tax series, Joetta and Jay are all about discussing solutions available in case you fall behind in making your tax payments to the Department.
We’ve all done it … no sooner have you left the house than you get that nagging feeling that something isn’t quite right. Then you start down the list; Did I lock the back door? Did I leave the iron on? Did I take Spot’s chew-toy to the kennel? You’re on a family vacation when all of a sudden you realize your sales tax payment wasn’t made when it was due. Why you fell behind in making your business tax payments to the Department is not nearly as important as what you need to do to remedy the situation. So, if you’ve fallen behind, don’t let panic set in … contact us, we’ll be glad to work with you to get the problem resolved.
To better understand what happens IF you get behind, let’s walk through the tax-collection process.
- If the Department finds that you have an unpaid tax due, a bill is issued. You have 45 days to either pay the bill or lodge a protest if you don’t think it is correct. We’ll work with you to address your protest; the bill may be cancelled at that point, we may settle on a reduced amount to be paid or you may wind up paying the whole amount due. If warranted, a brief hold may be placed on the account so you have time to collect information to support your position. The important thing is for you to contact us within that 45-day window; if you don’t, you have lost your opportunity to protest up front.
- If you don’t take any action, an updated bill is issued and you are given 10 days to pay the amount due. Remember, once the bill gets to this stage you’ve lost the opportunity to protest up front; instead, you’ll have to pay the bill and then claim a refund of some of the money paid. You really need to take care of the bill by this stage because additional penalties kick in if the bill goes to the next stage, which is a warrant for the collection of tax due.
Note – If the reason you’re not contacting us is because you don’t have the funds to pay what’s due, we’ll work with you. If the business owes more than $500, you might be eligible for a payment plan. At this point the two most important things to know are 1) that the bill won’t go away on its own, and 2) we can’t help with a payment plan once the bill goes to a warrant for the collection of tax.
- A warrant for the collection of tax due causes all kinds of problems. First, a lien is placed on the business property; liens may also be placed on the assets of the company’s responsible officers. This is serious stuff; it goes on your credit report, and could keep you from selling your car, house, or from getting financing to buy that yacht you’ve had your eye on. Though collected by the sheriff, the warrant is not for your arrest. That said, the sheriff chooses the method of collection, which can include selling the business’s (or your) property at an auction, garnishing your wages, or levying your bank account.
As you can see, the longer the collection process goes on, the more serious the consequences. Businesses like yours are the life-blood of Indiana’s economy; let’s work together to help keep it in good standing, and to keep it growing.
Hey, speaking of growing, be sure to tune in to Joetta and Jay’s next article, which is about how gardens and businesses have much in common. It’s all about that much beloved four-letter business word: grow!
- What does the state require to start a business?
- How can I check on my State income tax refund?
- How do I obtain a state tax number to collect sales tax?
- Who can I contact about Indiana income tax?
- Where do I go for tax forms?
- Where is my state tax refund?
- I filed my Indiana tax return. I owe, but am unable to pay at this time. What sh...
- I worked in Indiana six months. Then I worked six months in another state. How s...
- Know when I will receive my tax refund.
- File a part-year Indiana tax return.
- File my taxes as an Indiana resident while I am in the military, but my spouse is not an Indiana resident.
- Take the renter's deduction.
- Pay my tax bill in installments.
- Claim a gambling loss on my Indiana return.
- Have more time to file my taxes and I think I will owe the Department.
Welcome to Tax Talk, hosted by DiB (dye-bee), the Indiana Department of Revenue’s individual income tax guru. DiB, who says she’s been with the Department “since the earth cooled” (though it’s actually 30+ years), writes and develops Indiana’s individual income-tax instruction booklets and forms. DiB created Tax Talk to address Indiana individual income tax questions and issues during the filing season. If you would like to submit a question or topic suggestions, please send those to DiB at feedback@dor.in.gov
Individual Tax Links
Indiana Free Filing - I-File
Individual Tax Forms
Pay Indiana Taxes Online
Internal Revenue Service
Other State’s Tax Forms
