What is a delinquent account?
An account becomes delinquent when the due date for a tax return or other established liability has passed and the amount due remains unpaid.
What can I do to avoid becoming delinquent?
Know your tax responsibilities and plan for them, and pay careful attention to the due date on your tax return. Also remember to open and read correspondence sent to you by the Office of Tax and Revenue; it may contain reporting instructions, due dates, changes in laws or tax rates, or other important information that may affect your tax responsibilities.
What happens if my account becomes delinquent?
Penalties and interest begin to accrue on the unpaid tax until the entire balance is paid in full. If you do not respond to letters or notices and your account continues to be delinquent, it is assigned to a revenue officer or tax examiner for collection. These Collection Division representatives will contact you by telephone, by letter or in person to resolve the delinquency.
What happens if I do not respond or make satisfactory payment arrangements during the collection process?
The Office of Tax and Revenue may file a tax lien covering all unpaid tax, fees, penalties, and interest. The lien is recorded at the District’s Recorder of Deeds office, where it becomes public record and appears as a tax lien on your credit report.
What are the effects of a filed lien?
A filed tax lien enables the District to seize property (bank accounts, wages, and personal property) to pay the debt. OTR will also file the tax lien in county courthouse throughout the country where assets are located and owned by an individual, business, or owners and officers of a business. Since tax liens become public record, they can appear in local newspapers and business journals that list all Superior Court filings, in addition to being displayed on the Office of Tax and Revenue’s website. A tax lien will appear on a taxpayer’s credit history for 10 years, even after the debt is paid in full.
Can payment due me from the District be used to offset my tax liability?
Yes. Any money the District owes you for goods or services or as a personal or corporation income tax refund will be applied to unpaid tax balances.
How do I request a penalty waiver?
The Office of Tax and Revenue may waive or cancel delinquent return penalties in limited circumstances if you show reasonable cause. Reasonable cause is broadly defined as your exercising ordinary business care and prudence in the discharge of your tax obligations, but some uncontrollable outside event (such as a fire destroying your records) prevented you from complying. A waiver request should be submitted in writing and include any supporting documentation. The request must explain the circumstances that caused your return to be late. (Note: Failure of the Office of Tax and Revenue to mail tax forms or notices is not grounds for a waiver of interest).
Will filing for bankruptcy eliminate any taxes owed?
Payment of your business taxes cannot be avoided through bankruptcy proceedings. Business taxes due the District are not discharged in bankruptcy. If a bankrupt business does not have enough assets to pay the District taxes, the owners and specified corporate officers are personally responsible for the taxes.
If I operate as a corporation, can I avoid personal liability for taxes?
No. The president, a vice president, the treasurer, and any other officer is personally liable for the corporation's unpaid sales and withholding taxes, penalties, interest, and fees. Any officer of the corporation who exercises direct control over its fiscal management is personally liable for withholding and sales taxes, penalties, interest and fees.