Dealing with Illinois Tax Collection Agency for Small Tax Debt
If you find yourself asking, can I discharge these taxes?, read more about helpful solutions below.
Illinois Department of Revenue granted several small collection firms the legal right to collect tax. In many cases, once the tax is assigned to a private collector, you may have to work with this company.
But sometimes these agencies can be outsmarted.
Here are a few options for handling the debt with Illinois private collection firms:
Payment (or Non-Payment) Options
- Collection firms are authorized to enter formal Installment Agreements for the Illinois Department of Revenue. However, these arrangements usually require a “down payment” of a significant amount of the liability, usually 30% to 40%. Thereafter, the liability must be paid off within 12-24 months.
- You can simply request the collection firm to take a small, manageable monthly payment. This payment is not exactly the same as a formal Installment Agreement. However, this method usually stops collection enforcement while also paying down the liability.
- If you are unable to make any payment, you may seek temporary protection from the state of Illinois. This can allow you a deferment of any payment, for a certain period of time, usually up to 12 months.
- The tax, interest, penalties, and collection fees may be dischargeable in Chapter 7 bankruptcy.
If You Dispute the Tax
- For returns filed within the last three years, ask your tax accountant about filing Amended Tax Returns to correct the tax debt.
- You can always challenge the amount of the basic tax. This will in turn change the amount of any associated interest, penalties. Moreover, the liability can be reassigned from the collection firm back to the Dept. of Revenue.
- However, depending on the amount of liability, this might not be cost effective for you. But if the tax debt is significant, the effort can be well worth the legal fees.
- If the debt was determined over 60 days ago, you may have to challenge the tax with the Illinois Independent Tax Tribunal. This requires a lawyer to file and handle your case.
Partner with Business Tax Settlement today and connect with a tax lawyer to reduce penalties!