District law requires that taxpayers pay their tax in full when filing a return. However, if a taxpayer cannot pay in full, the Office of Tax and Revenue (OTR) may allow them to pay in installments. Taxpayers may request an installment agreement from the Collection Division representative assigned to their case.
When making installment payments, taxpayers are expected to pay their current taxes as well. This means they must have the proper amount of withholding taken from their wages or make timely estimated tax payments. If installment payments are not made timely and for the agreed amount, OTR may collect the taxes due by seizing wages or bank accounts.
Installment agreements involving amounts larger than $5,000 or lasting more than 24 months require the following documentation:
- Form PA-1 (for individuals) or PA-2 (for businesses) - These are found in the Tax Forms, Publications, and Resources section.
- Current federal income tax return of responsible individuals or the business
- Latest balance sheet and profit and loss statement (for businesses)
Once an installment agreement is reached, a lien determination will be made, and a lien may be filed. State and federal refunds are subject to interception and will be applied to any outstanding tax liabilities. All payment agreements are subject to periodic re-evaluation.