How Mississippi Collects Taxes & How Taxpayers Can Get Tax Help
Mississippi’s Department of Revenue, which used to be called the State Tax Commissioner, is responsible for administering the tax laws for the State and primary among those responsibilities is the collection of taxes. Taxpayers who don’t file and/or pay their taxes in full and on time risk being the subject of very aggressive collection tactics by the Department to ensure that they pay what they owe. If you’re in this situation, you should seek tax help from a reputable professional.
Notice of Assessment
Once the Department of Revenue sees that you have an outstanding tax debt, they will send you a Notice of Assessment advising you of the amount of money you owe. They will mail it to your last known address or if it’s a business that owes the taxes, the address of the business.
Interest & Penalties
Taxpayers who do not file and/or pay their taxes when due, risk having interest and penalty charges added onto to their tax bill, as follows:
Income Taxes Paid Late: If you are late paying your income taxes you are subject to 1% interest on the amount underpaid per month starting on the original due date and continuing until taxes are fully paid. You are also subject to a 0.5% penalty charge per month, up to a total of 25%.
Withholding Taxes Paid Late: Interest added in the amount of 1% per month starting on the date the taxes were due plus penalty charges of 10% of the amount due, for paying late.
When the Department of Revenue determines how much you owe in back taxes, they have the right to file a lien against you as security for the debt. A lien is a publicly recorded document that would essentially stake a legal claim on your property. The lien would be filed in the county clerk’s office where your property is located and would certainly have a negative effect on your credit and may even prevent you from buying, transferring or selling real estate.
If have a delinquent tax bill you owe the State of Mississippi, the State has a right to intercept any future federal or state tax refunds and apply that money to this outstanding tax bill. Before you receive a Notice of Intent to Offset, it would be wise to hire an experienced tax professional who can offer you the kind of tax help you need to resolve your tax matters with the State.
Seizures & Garnishment
Once the Department of Revenue files a lien against you a warrant is issued to seize your assets. This would include your bank account(s), property and/or your wages. Before any of these things occur, you will have ample warning and this would be the time to hire a reputable tax expert or CPA who can provide you with the level of tax help you need to avoid having these collection measures destroy your finances.
If your employer receives a garnishment order from the State, he/she is required to garnish your paycheck until your tax debt is fully paid. Your bank account(s) could be drained as well; up to the amount you owe in back taxes. Any property you own could also be seized and ultimately sold to take care of your tax liability.
Suspension or Revocation of Licenses & Permit
The Mississippi Department of Revenue may legally suspend or revoke licenses and permits of businesses not complying with tax laws. These may include dealer licenses, tobacco permits, sales tax permits designated agent status or sales tax permits. To avoid having tax issues derail the operation, every business should regularly consult with a qualified professional for tax help and advice. Once the Department of Revenue decides there is cause to suspend or revoke your license or permit, they will either mail or deliver by hand a Notice of Intent.
The Notice of Intent will state the reasons for this action and allow you a chance to submit a written request for a Review Board hearing. You will be given 30 days from when the notice was dated to appeal this action before the Review Board. If you do not file your appeal within 30 days, the Department’s intended action will go into effect as detailed in the Notice. There are no more reviews allowed before the Board of Tax Appeals or before any court.
Personal Liability for Corporate Taxes
If you are the corporate officer or individual in control of, supervising or responsible for filing tax returns, paying taxes or handling the corporation’s finances, you may be held personally liable for any delinquent taxes owed by the corporation.
Options Available to Mississippi Taxpayers for Tax Help & Tax Relief
If you’re a Mississippi resident and are behind in filing and/or paying your taxes, the Department of Revenue has a number of programs in place that can offer tax help and in certain situations, some level of tax relief.
To avoid aggressive collections, taxpayers should act proactively in contacting the Department of Revenue to determine which options may be available to them so they can hopefully resolve their tax issues before problems arise.
Power of Attorney
You are within your rights to have someone else represent you before the Mississippi Department of Revenue regarding your tax situation. To authorize the Department to disclose your private tax information to this person you would need to complete the Mississippi Representation & Power of Attorney form 21-002.
If you are unable to pay the full amount you owe in taxes, but you filed your return on time you may ask for tax help in being allowed to make installment payments on the debt. The following are some, but not all of the eligibility requirements for an Installment Agreement:
Throughout the last 5 years the taxpayer (and spouse if the couple filed jointly):
- Filed and fully paid all income taxes, which means the taxpayer will not be allowed to arrange an Installment Agreement for taxes he/she owes from prior years.
- Has not entered into another Installment Agreement to pay off taxes over time.
- Is not involved in bankruptcy proceedings at the current time.
Depending on your particular situation, one of two different Installment Agreements would apply:
- If you owe from $75 to $3,000 you would need to pay the full amount within one year in 12 equal payments. For example, if you owe $1,500 you would pay $125 per month.
- If you owe over $3,000 and you already have an Installment Agreement with the Internal Revenue Service for the very same tax year, Mississippi will let you spread your payments over 60 months. To get this approved you would need to provide a copy of your Installment Payment Agreement with the IRS. In either case, you would continue to be charged interest until the entire debt is paid.
To apply for tax help through an Installment Agreement, do one of the following:
- Contact the Income Tax Bureau at (601) 923-7040 and speak to someone about your situation and ask how best to proceed.
- Complete Mississippi Installment Agreement Form 71-661 and staple the form to the front page of your tax return, sending it in with your return.
- Complete Mississippi Installment Agreement Form 71-661 and send it to the following address:
Income Tax Bureau
P. O. Box 22805
Jackson, MS 39225-2805
If the Mississippi Department of Revenue accepts your request, they will notify you by mail with all the details. They will let you know exactly how much you owe, how much to pay each month and when your payments are due. You can go online to the Mississippi Taxpayer Access Point (TAP) to make your payments and review your progress.
If you end up filing for bankruptcy at some point during your payment period, you would need to immediately phone the Bankruptcy Section at (601) 923-7393 and notify them.
Abatement of Penalties
When the Department of Revenue realizes you are delinquent in paying your taxes, they will send you a detailed tax bill that includes how much you’ve been charged in penalties. If you dispute the penalties, you can ask the Department to waive them in an Abatement of Penalties. You would need to reach out to the Department of Revenue by phoning (601) 923-7000 to file a request for this.
Mississippi taxpayers can easily reach out to the Department of Revenue by phone, by mail or online through the Department’s contact portal.
Phone: (601) 923-7000
Department of Revenue
P.O. Box 1033
Jackson, MS 39215-1033
Information regarding liens and garnishments:
Phone: (601) 923-7391
Department of Revenue
P.O. Box 23338
Jackson, MS 39225-3338