Delaware Taxing Information
If you are unable to pay your tax in full you may be able to arrange to pay your tax debt through installment payments. If you set up a payment plan that is over 24 months, you will be required to have the payment automatically deducted from your financial institution or to have a voluntary wage deduction to avoid a tax lien being filed. The Division of Revenue is required to file a Notice of Judgment on payment plans over 60 months to protect the interest of DE DOR. You will still be charged interest and penalties on the original tax liability along with interest on the unpaid balance of penalties and interest. Any Delaware, Maryland or Federal refunds due to you will also be offset and applied to your balance due.
To avoid enforced collection, you must abide by all terms of the agreement such as paying on time, no missed payments and timely filing and payment of all required tax returns. The Department of Revenue may also request current financial information that affects your ability to pay and change the plan based on your financial situation. You will receive a letter 30 days in advance of any changes that would be made to your plan.
Notice of Judgment
If the DE DOR has assessed a tax that is unpaid or underpaid, you have received a Demand for Payment and you have refused or failed to pay the tax or otherwise resolve your issues, a Notice of Judgment may be filed. The judgment in the amount of your tax debt attaches to all your property (i.e. your house or car) and rights to property (i.e. accounts receivable). A judgment will harm your credit rating and is a public notice to your creditors that you have a government claim against your property.
If the tax remains unsatisfied, the judgment will automatically continue for 20 years after the date of filing. The Notice of Judgment will be released within 30 days of paying or adjusting the full tax debt along with any interest or other charges.
Offer in Compromise
The Department of Revenue is currently revising the Compromise Procedures. No compromise requests will be accepted until the revision is completed.
If you have an unpaid tax bill and have any refunds due to you, the refund will be offset and applied to your unpaid tax debt.
Power of Attorney
You may represent yourself or you may authorize an attorney, certified public accountant, enrolled agent or any person enrolled to practice before the Delaware Division of Revenue to represent you. To permit another person to have access to your tax information in Delaware you should submit any properly written power of attorney or use IRS Form 2848, Power of Attorney and Declaration of Representative, or IRS Form 8821, Tax Information Authorization.
The DE DOR may seize and sell any type of real or personal property that you own or have an interest in if you fail to pay or make arrangements to pay your tax bill. This includes residential and business property. After property has been seized a public notice of pending sale must be given. After giving notice, DE DOR must wait 10 days before holding the sale unless the property is perishable.
If a warrant has been filed and your salary or wages are attached, your employer will be required to withhold and forward your garnished wages to the Department of Revenue to satisfy your tax liability.
Priority One: Stopping Aggressive Enforced Collections
The Delaware Division of Revenue may use a warrant to enforce collection of taxes that have not been voluntarily paid. A warrant gives legal authority for DE DOR to take property, either real (cars, houses, boats) or held by a third party (wages, bank funds), to fulfill the tax liability. In order for DE DOR to take warrant action, the following requirements must be met:
- 1) The DE DOR must assess the tax and send a Demand for Payment
- 2) You must neglect or refuse to pay the tax
- 3) The DE DOR must file a Notice of Judgment at least 10 days before warrant action.
If the Division of Revenue believes that collection of the tax is threatened, for example the taxpayer leaving the country quickly, immediate action may be taken without the 3 requirements being met.