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Can a payment agreement help me manage my state tax debt?

The revelation that you owe a significant amount of money to the Georgia Department of Revenue can be understandably alarming. That's because you may not be in a position to pay off the amount owed in one fell swoop, and you may fear that your inability to do so will somehow result in ruined finances or, far worse, incarceration.

The good news is that these fears are largely unfounded, as state officials are not necessarily looking to lock you up, and are actually willing to work with you to devise a repayment plan, otherwise known as a payment agreement.

What is a payment agreement?

A payment agreement is essentially a formal contract between you and the Georgia Department of Revenue establishing a payment schedule to pay off your tax debt in less than 36 months.

How do I set up a payment agreement?

Indebted taxpayers can request a payment agreement by submitting a proposal outlining both a payment schedule and monthly payment amount to the Revenue Department either online or via the mail.

Will my request be approved automatically?

No. In general, the Revenue Department will not approve requests for payment agreements if 1) the taxpayer has filed for bankruptcy, 2) the taxpayer has yet to file all of their state tax returns, 3) the taxpayer has an offer in compromise application pending or 4) the tax debt has already been turned over to a private collection agency.

What happens if the Revenue Department accepts my request?

A letter will be mailed setting forth the amount owed, the amount of the monthly payments, the number of payments to be made and the date on which the first payment is due.

Will this make me immune from other collection methods?

No. The Revenue Department can still utilize other methods of collecting the tax debt, such as confiscating your federal or state tax refund.

What if I want to change the terms of the payment agreement?

Once entered, no changes can be made to the terms of an existing payment agreement. However, the Revenue Department may prove willing to cancel an existing agreement and set up a new one.

If you have questions relating to payment agreements or would like to learn more about your options as they relate to a tax debt owed to the state, consider speaking with an experienced legal professional. 

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