Louisiana Taxing Information
Cease and Desist Orders
If you collect sales tax and income tax withholding and have failed to pay the taxes to the Louisiana Department of Revenue, the Secretary of Revenue may require you to show cause as to why you should not cease further pursuit of business. If you have received a notice that a cease and desist order has been filed against your business, you need to contact LDR immediately or it could result in the closure of your business. If you fail to comply with the cease and desist order, the violation may be considered a contempt of court and be punishable by tax code.
Driver's License Revocation
Louisiana tax code authorizes the Department of Public Safety to suspend or deny renewal of your driver's license if you have an outstanding tax liability of more than $1000 that is final and is not appealable. If you have received a notification from the Department of Public Safety stating that your driver's license has been suspended or will not be issued or renewed, you must pay the tax bill or arrange a payment agreement before you will be able to receive a tax clearance letter from the Department of Revenue. You are required to bring the clearance letter and pay a $60 reinstatement fee before your license will be reinstated or issued.
Installment plans are available to taxpayers who are not able to pay their tax bill in full. The installment plan may not exceed 6 months and requires you to make monthly payments in the amount of 1/6 of your total liability. You must remain compliant with all state tax returns and payments during the time of your agreement. Federal and state refunds that are due to you may still be garnished and applied to your tax bill. A tax assessment and lien may also be filed to protect the state's interest, even if you have an approved installment agreement.
Can you get my interest waived?
In most cases, interest cannot be waived. However, in certain circumstances interest may be compromised or abated.
If you do not pay your outstanding tax liabilities, the state of Louisiana has the authority to levy upon, seize and sell any of your property or rights to property to satisfy the tax debt. This may include real estate, vehicles, goods, bank accounts, stocks, wages and more. Bank accounts and wages are the most commonly seized type of property.
Offer in Compromise
The tax code provides that the Secretary of Revenue may compromise on judgments for tax liabilities of $500,000 or less. The Offer in Compromise Program strives to achieve a compromise that is in the best interest of both the state and the taxpayer. The OIC program should only be considered when it is determined that your full tax liability cannot be collected and the offer reflects your best ability to pay. You will be required to provide documentation of your financial condition. An Offer in Compromise is not protected by confidentiality provisions, and is a public record that is open to inspection by the public upon request. A list of approved Offers in Compromise is published yearly by the Louisiana Department of Revenue.
Any offer will not be accepted if it is determined that it is being filed for the purpose of delaying collection. If the offer is accepted and the agreed upon amount is paid in full, any tax liens will be released.
If you fail to file your tax return on time or fail to pay the amount due on time you will be assessed penalties in addition to your tax liability.
- Late Filing: there is a penalty of 5% of the tax due for each 30-day period that you fail to file. Maximum penalty is 25% of the total tax.
- Late Payment of Individual Income Tax: for delinquent payments there is a penalty of ½ of 1% for each 30-day period that you fail to pay. Maximum penalty does not exceed 25% of the total tax.
- Late Payment of Other Taxes: for delinquent payments of all taxes except individual income tax, there is a penalty of 5% of the tax due for each 30-day period that the liability remains unpaid. Maximum penalty does not exceed 25% of the total tax.
Can you get my penalties waived?
If your failure to pay or file on time was not due to negligence, but was the result of a reasonable cause, we may be able to apply for a penalty waiver by submitting a Request For Waiver Of Penalties For Delinquency when you send in payment for the tax, interest and fees.
Officers, directors, or managers or members of corporations, limited liability companies, or limited partnerships may be held personally liable for the failure to remit income tax withholding payments or sales tax payments to LDR. If you receive a Notification of Intent to Pursue Corporation Officers for Delinquent State Tax Liabilities it means that all other attempts to collect the delinquent taxes, have been unsuccessful. If you are not an officer of the company or did not have direct control or supervision of the taxes, you will be required to provide official documentation along with the name and address of the officer that was responsible for filing the returns and paying the taxes.
You may represent yourself regarding tax matters before the Louisiana Department of Revenue, or you may choose to have a third party to represent you. To have an authorized agent or attorney represent you, you will need to execute a Louisiana Power of Attorney and Declaration of Representation.
As provided by tax code, any unpaid taxes, penalties, interest or attorney's fees that are due to the Louisiana Department of Revenue, shall operate as a lien. A lien secures the state's interest in your personal or real property and rights to property. You will be held responsible for any fees associated with the cost of recording the lien. Once you have paid your liability, the lien will be released. A tax lien may negatively effect your credit report and ability to purchase or sell real estate.
When you fail to pay any tax, penalty or interest the collection of the debt may be enforced by distraint and sale. This includes the right to garnish your wages by up to 25% of your pay.