How New Hampshire Collects Taxes & Tax Help Available to Taxpayers
New Hampshire’s Department of Revenue Administration is responsible for collecting State taxes. Its Collection Division is in charge of seeing that taxpayers comply with the law regarding filing and paying their taxes. Should there be a problem, the Collection Division begins collection activities to pursue those who have not filed and/or paid their taxes.
The State of New Hampshire does not have an income tax in which individuals report their W-2 wages nor does New Hampshire have a State sales tax. However, residents are obligated to pay taxes on the income earned through interest and dividends, and they pay consumer excise taxes as well as business taxes.
Any problems taxpayers have regarding their New Hampshire State taxes must be taken up with the Department of Revenue directly. Since the State asks for very little in personal income taxes, the collection of all other taxes is taken very seriously.
Notice of Assessment
The Department will send you a Notice of Assessment (tax bill) after you’ve been audited and found to owe additional tax, interest and/or penalties. An assessment can also be made with no audit whatsoever, which in this case would be essentially a demand for payment. This would be a good time to consult with a professional tax advisor or CPA for the tax help you need to avoid serious problems down the road.
If you do not pay the full amount you owe in state taxes or fail to file your tax return as required by law, you run the risk of having penalties added onto your tax bill.
Types of infractions that warrant penalties:
Failing to File Tax Return: if a taxpayer does not file his/her tax return on time, unless the Department has granted an extension, a penalty of 5% of the amount owed or $10 (whichever is more) for every month or portion of a month that the tax return continues unfiled, shall by law be assessed. This penalty shall not be over 25% of the amount owed, or exceed $50 (whichever is more). Penalties are not assessed in cases where the tax return is filed during the extended filing time period.
Failing to Pay State Taxes: a penalty of 10% of the amount not paid or the underpayment shall by law be added onto the amount of tax owed in the event their was a reasonable cause for failing to pay the tax owed and not intentional neglect. If the taxpayer failed to pay his/her taxes due to a fraudulent act the penalty would be 50% of the amount not paid or the underpayment.
Understatement of Taxes: in the event that a business has a substantial understatement of taxes owed, the Department of Revenue may assess a penalty of 25%.
Below is a list of several common methods the Department of Revenue uses to collect unpaid back taxes, interest and/or penalties:
The Department of Revenue Administration has the right to put a lien on your bank account(s), real estate, receivables, personal property and the like if you fail to pay your taxes, interest and penalties. Similarly, if you do not comply with State tax codes in any way, a lien can be placed on your assets, which may be sold in a tax sale to satisfy the debt. Before your property goes on the auction block you should consult with a reputable professional for advice on tax relief.
Suspension or Revocation of Licenses
If you do not pay your taxes, the penalties and/or interest you owe when assessed or due, the Collection Division may take steps to suspend or revoke any licenses you have through the State.
Seizure of Property
The Collections Division of the New Hampshire Department of Revenue Administration has the right to seize any property, real or personal, you own to satisfy your delinquent tax liability. You do not want things to get this far so it would be wise to hire a reputable professional who can provide you with the type of tax help needed to get out from under your tax liability.
Legal Action in Court
The New Hampshire Attorney General may initiate court action against you to ensure that you pay your tax liability.
If you owe back taxes to the State, any credits for taxes, refunds, interest or penalties you pay to the Department, shall be applied to your tax liability to offset that. This is whether or not you have appealed or contested your tax debt.
New Hampshire Offers Tax Relief Programs to Help Taxpayers in Debt
Similar to the Internal Revenue Service, the New Hampshire Department of Revenue Administration has programs offering tax help to taxpayers having difficulty paying their taxes. Some of the common ways that taxpayers use to resolve these problems with the Department are discussed below:
Filing an Appeal to a Tax Assessment or Refund Denial
If you dispute the assessment you received from the Department of Revenue on the amount you owe in taxes, interest and penalties or your refund claim was denied you are within your rights to file an appeal. You have 60 days from the date on your Notice of Assessment in which to file your petition. You or your power of attorney must sign your written appeal and it must contain the following details:
- Your name or the name of your business
- Your social security number, department ID number, federal employer ID number or department license number if applicable
- Name and address of your power of attorney, if any
- Statement of issues and facts in your case
- The action you are requesting the Department to take
- Identification of any cases, statutes, orders, rules or other authority that you believe entitles you to get the Department to comply with your request
- A copy of your Notice of Assessment
Send your packet to the following address:
New Hampshire Department of Revenue Administration
109 Pleasant Street
P.O. Box 1467
Concord, NH 03302-1467
Installment Payment Agreements
In the event that you cannot pay the full amount you owe in taxes including the penalties and/or interest, there is an installment payment program that you can request. The Department would have to agree that this payment plan would facilitate the collection of your back taxes, penalties and interest and be convinced that there is no way you could pay what you owe in full.
Installment payment agreements may not extend beyond six months and you would need to agree to a lien being placed on your property in order to secure payment of the debt in the interest of the State. Upon 30 days notice an installment payment agreements can be changed or cancelled by the Department in the event your finances change, you do not make your payments as agreed or in some manner do not comply with the agreement.
The Department does not give out highly specific details on payment plan options. To learn what your options might be for paying off your tax liability, call (603) 230-5920 Monday – Friday from 8:00 a.m. to 4:30 p.m. Before calling it might be a good idea to get some tax help advice from an experienced tax professional.
Abatement to Waive Tax Penalties
You can get your penalties and perhaps even interest waived if you took advice from the Department of Revenue that later turned out to be erroneous and as a result you incurred penalties. You must make your request for abatement in person or in writing.
To request abatement you can contact the Department using the contact information provided in this article. They will put you in touch with the proper person to communicate with depending on which type of taxes this involves.
Power of Attorney
You are within your rights to give someone else the authority to represent you with regard to your tax issues with the Department of Revenue. You would need to submit one of the following in order to have power of attorney granted:
- New Hampshire Power of Attorney Form DP-2848
- Federal Power of Attorney Form 2848
- Signed letter that includes all the pertinent information, sent to the Department of Revenue Administration.
Claim for a Refund of State Taxes
If you think you’ve overpaid your State taxes and a refund has not been issued, you may need to file an amended New Hampshire tax return as a way of requesting your refund, otherwise you can write a letter requesting your refund.
Your request must be filed within 3 years from the date these taxes were due or 2 years from the date you overpaid your taxes.
Each year a percentage of state tax returns are selected for an audit by the Department of Revenue. Some are randomly selected while others are chosen because it is highly likely that they are inaccurate. Having a tax audit does not indicate that you’ve done anything wrong or that you owe more money. New Hampshire takes pride in saying that many of the tax returns the Department audits have nothing wrong with them and the files are closed with no changes. Some show an overpayment of taxes and others show that more money is owed.
Audits are done through the mail, at the your residence or place of business, the Office of the Department of Revenue or your power of attorney’s place of business. If the Department finds that you owe additional tax, interest and penalties, a Notice of Assessment will be sent. When undergoing a tax audit it is always advisable to have professional tax advice from someone you trust. There are tax help options available that could be very beneficial if your audit shows that you owe money.
Contact Information for the New Hampshire Department of Revenue
New Hampshire Department of Revenue Administration
109 Pleasant Street
P.O. Box 457
Concord, NH 03302-0457
Main Phone: (603) 230-5000
Customer Service: (603) 230-5920
Municipal Services: (603) 230-5090
Property Appraisal: (603) 230-5950
Collections: (603) 230-5900
Hearings Bureau: (603) 230-5002
Tax Form Requests: (603) 230-5001 or the Form Page on their website
Deaf or Speech Impaired: Relay NH (800) 735-2964