A tax lien may be filed with the District of Columbia Recorder of Deeds if a taxpayer neglects or refuses to pay the District within 10 days after receiving a Notice of Tax Due and a demand for payment. The tax lien puts the public on notice that the District has a preferred claim over other creditors. A lien can affect a taxpayer's credit rating and can prevent them from borrowing money or selling real estate. If the taxpayer attempts to sell real estate in the District, the taxes due will be paid out of the sale proceeds, at which time the lien can be released.
To collect the proper amount of tax due, the Office of Tax and Revenue (OTR) may seize wages, bank accounts, accounts receivable, and other money held by third parties and owed to the taxpayer. When OTR issues a levy, the law requires the person holding the money to turn it over to OTR.
At times it may be necessary to seize property such as a residence, business establishment, business property, automobile, boat, etc. After the property has been seized, OTR may sell the property at a public auction if the tax remains unpaid. The proceeds of the sale will first pay the expenses of the sale, and the balance will be applied to the delinquent taxes.
The Office of Tax and Revenue (OTR) use the services of collection agencies to collect delinquent taxes. The collection agencies focus on stop-filers, non-filers and taxpayers who are unknown to OTR, but are conducting business in the District of Columbia and have not complied with District tax filing requirements. The District utilizes the services of MuniServices and PRA Government Services. If you have received correspondence or need to contact a representative from one of these collection agencies, their contact information is as follows:
209 Pennsylvania Avenue, SE
Washington, DC 20003
(800) 987-0999 (toll)
(202) 546-8337 (local)
(800) 987-5450 (fax)
Lakeside Professional Campus
190 N. Evergreen Avenue, Suite 205
Woodbury, NJ 08096
All Payments and Correspondence should still be sent to:
Office of Tax & Revenue
PO Box 37559
Washington, DC 20013
Under this program, all liabilities due to OTR are cross-matched against any pending District or federal tax refunds. OTR will also levy against any District government contracts for work performed or services rendered. Once the liability has been paid in full, the levy will be released. If the liability is not satisfied, OTR will continue to intercept any pending funds, and the taxpayer or vendor will receive notification of the offset.
Sales Tax Certificate Revocation
OTR may choose to revoke a sales tax certificate in lieu of seizure of a business. When this action occurs, the business owner is prohibited from conducting sales, and, in most cases, other District licenses held by the business may immediately be revoked by other District licensing agencies under the Clean Hands Act.
Trust Fund Recovery Assessment
Collected sales and employer withholding taxes are considered trust funds. If a corporation, LLC or partnership does not remit these taxes to OTR, individual(s) responsible for making financial decisions for the business (such as corporate officers, bookkeepers, and accountants) may be held personally liable for payment of the unpaid trust fund taxes. Individuals held liable for unpaid trust funds are subject to the normal tax collection process, unless payment is voluntarily made.