North Carolina Individual Tax Rates | North Carolina Irs Customer Service Number
Tax Resolution Options for North Carolina Back Taxes
The Department of Revenue or DOR, which is a cabinet-level executive agency is liable for managing tax laws and collection of NC taxes. The Governor appoints the Secretary of Revenue. Do you have due back taxes to North Carolina? You might have lost your job or were in the hospital. You might just had a hard year and not have the required money to pay your state income taxes. No matter what is the reason, you must know what will happen when you do not make payments to NC State actively. Moreover, you must also understand what all are your tax payment options. Before you pursue most NC tax resolution options, taxpayers are required to get the final notice of the assessment.
North Carolina Department of Revenue Contact Information:
Individual Tax Assistance: 1-877-252-3052
Business Tax Assistance: 1-877-252-3052
General Inquiries: 1-877-252-3052
Collections Assistance: 1-877-252-3252
Tax Refund Assistance: 1-877-252-4052
Website: https://www.ncdor.gov/
North Carolina Individual income tax options
The North Carolina state provides various options to taxpayers who have due state income back taxes. These tax resolution options are available for the taxpayers so that they can attain a resolution with the state about unpaid tax responsibilities. The list provided here is not all-inclusive but can offer taxpayers some idea of the various tax options available.
North Carolina provides an Installment Payment Agreement. A lot of people refer to it as a tax payment plan or instalment agreement. With this option, if the taxpayer can’t make the payment of the full balance, they can make the payment over time. The kind of tax and the amount due mainly determine the duration of the Installment Payment Agreement. Taxpayers can get information on it through the website.
The Department of Revenue in North Carolina has an Offer-in-compromise program for eligible and financially stressed taxpayers. With this tax resolution option, a taxpayer can make a payment of a lump sum amount for settling down the tax liabilities in full amount. The OIC tax program is also an excellent option for taxpayers who can’t comply with the installment payment agreement.
North Carolina Innocent Spouse Relief
In North Carolina, spouses are liable jointly and severally for the payment of due taxes. But a spouse is allowed relief from a joint state income tax liability that is attributable to a significant understatement by the other spouse if in case the spouse qualified for innocent spouse relief option for federal tax due to the same “ significant understatement” by the other spouse under Internal Revenue Code section 6015.
North Carolina statute has not stated a time limit for filing. In comparison, for qualifying for innocent spouse relief under Internal Revenue Code Section 6015, taxpayers should file form 8857 not later than 2 years before the initial IRS attempt to collect the tax from the taxpayer that happens after July 22, 1998.
A taxpayer can also take into consideration bankruptcy for discharging NC tax responsibilities. However, some of the tax liabilities are non-dischargeable. For instance, trust fund taxes, income taxes due within three years of the date of a bankruptcy petition or tax liabilities owed because of unfiled or fraudulent tax returns. When a taxpayer takes into consideration this option, they should reach out to any experienced bankruptcy attorney.
NC tax penalties for not filing taxes
When a taxpayer does not make payment of their income tax completely on time, the unpaid tax becomes subject to penalty and day-to-day accruing interest. Taxpayers are also subjected to both civil and criminal penalties.
Failing to make payments and file tax penalties: When a taxpayer does not make a payment or file their state income taxes in the state of North Carolina, they are subjected to the below-written penalties:
Failing to file penalties: Returns that are filed past the due date are subject to a failure to file a penalty of 5% of the net tax due for every month or part of the month when the return is late.
Failing to pay penalties: When a taxpayer fails to make payment of their tax on time, North Carolina State will assess a penalty for late payment of 10% of the tax not made payment by the due date. When a taxpayer files filing of timely extension, the penalty is only applicable for the remaining balance owed if the tax paid by the real due date is less than 90% of the full amount due. If the taxpayer has made a payment of a minimum of 90% of the total owed tax, DOR expects the taxpayer to make payment of the remaining balance before the extension period expires to avoid the late payment penalties. DOR does not assess the late payment penalty when the taxpayer makes payment of the due amount with the amended return. The extra tax due is subjected to a 10% late penalty when DOR does not receive the tax payment within 45 days of assessment or a request for Departmental review.
Fraud, Negligence, Frivolous Tax return penalties
Negligence, penalties and big tax deficiency: When a taxpayer devalues their taxable income, in an amount that is equal to 25% or more of the total income, the 25% large specific income tax deficiency or other tax deficiency penalty is assessed. When the taxpayer understates their income by an amount less than 25%, then a 10% negligence penalty might be applied. When the taxpayer had an accuracy penalty assessed for the federal income tax cause, DOR will assess the 10% negligence penalty for the state income tax purposes, if in case a large deficiency penalty applies.
Fraud: When a taxpayer gets a fraud penalty from the federal government and their state return was on that fraud return, they are also assessed a 50% of the fraud penalty for state purposes. If the taxation authorities assess a fraud penalty, the state can’t also assess a taxpayer for negligence, large tax deficiency or failure to file for that same deficiency.
Frivolous returns: When a taxpayer files a filing of frivolous return, the state might assess up to a penalty of $500.A frivolous tax return is something that fails to offer required information for permitting determination that the tax return is correct indicates the tax return is incorrect and prods the intent to delay, impede or negate the purports for adopting a position that has no seriousness.
Other tax penalties by North Carolina
Failing to report federal changes: When a taxpayer does not report changes in federal tax returns within six months of getting notification from the IRS, the taxpayer might be subjected to failure to file and will lose the right to any kind of refund.
Inadequate funds penalty: When a taxpayer writes a bad check, they are assessed a penalty. DOR will assess a penalty of about 10% of the check amount. The bad check penalty has a maximum of $1,000.
Collection assistance fee: The state assesses a 20% fee of assistance for any tax, penalties or interest that is not paid by the taxpayer within 90 days from the due date of the payment. It is not applicable if the taxpayer starts making payments under an instalment agreement that became effective within 90 days.
Underpayment of the determined income tax: When interest on the underpayment of the determined income tax is owed, that amount should be added to the due tax.
G.S. § 105-236 specified the extra tax penalties for the taxpayers to review.
Interest
Interest gets accumulated on any unpaid tax return from the real due date. It is collected on the overpayments starting 45 days after the latest of
The date the taxpayer files the final return
The date the final tax return was due to get filed
The date of overpayment
On or before June 1 or December 1 of every year, the secretary of Revenue makes the establishment of the rate of interest for the next six-month period. The rate of interest for January 1st, 2019 to June 30th 2010 is 5%. Taxpayers can get updates on the website.
Forceful collection of unpaid taxes
When you do not make payment of your taxes, the Department of Revenue can make forceful collections against you. The department has several ways of collecting back taxes from people who are not willing to make payments. Here are some things that can happen:
Tax Warrant: It is also known as a lien, which is a tax warrant that is attached to your assets and protects the state’s interest. It also makes way for the seizure of assets.
Garnishment: The New Carolina DOR can garnish wages, payments and bank accounts from third parties to cover the unpaid taxes.
Asset Seizures: When the state issues a tax lien, it will seize the personal and real property.
Conclusion
There are several options available for taxpayers who cannot make payment of the North Carolina tax liabilities in full amount. Some of the tax resolutions are more easily accessible when compared with others. When taxpayers do not address the due tax liabilities, then NC State will go further with forceful collections. Forceful collection might include a Certificate of Tax Liability. It might also include wage garnishments and bank account levies among several other things. This that taxpayers must address tax issues as quickly as possible. In addition, consulting with or getting associated with a licensed tax professional can make the whole process of tax resolution easy.