Nebraska Taxing Information
The Tax Commissioner may contract with any collection agency within or without the state. Delinquent tax debts may be referred to a collection agency after a period longer than six months for which the tax has been due and owing and after the taxpayer has been given at least three notices requesting payment. Additional fees may then be required for collection services.
Liens & Garnishment
Failure to pay tax liabilities, plus penalties and interest, to the State of Nebraska may result in the filing of a lien on property or property rights of the taxpayer. A lien gives the Department the power to collect past due taxes, seize and sell sufficient property, or hinder the sale of assets in order to satisfy the debt. Property may include bank accounts or accounts receivable and may be enforced through garnishment of wages or salaries.
Notices and Appeals
Upon review of a taxpayer's reported information, books and records or as a result of an audit, the Department may assess additional taxes due. A Notice of Deficiency or A Notice and Demand for Payment may be issued. If you do not agree with an assessment, you may file a timely petition for redetermination within 60 days of the postmark of the Notice (except for drug tax and jeopardy assessments). If Notice is not protested within the timeframe necessary, the liability is considered due and payable. In the event of a protest, an informal conference will be scheduled in an attempt to resolve the issues. If issues are not resolved informally, the appeal will move to a formal hearing before the Tax Commissioner.
If you are unable to pay your taxes the Nebraska Department of Revenue has 3 payment options available.
- You can pay the entire amount over a 90-day period by making 4 equal payments. The first payment should be filed with your tax return, and the remaining 3 should be sent every 30 days thereafter. This type of plan involves no paperwork and you will receive an updated statement each month stating your remaining unpaid balance.
- You may pay by credit card through the Official Payments Corporation (OPC). There is a convenience fee of 2.49% of the tax payment.
- You may request an installment plan allowing you to make payments extending beyond a 90-day period with a written request on Form 27D, Payment and Authorization Agreement. Upon review of the request the department will either accept or deny the proposal. All installment agreement payments must be made by Electronic Funds Transfer (EFT).
If you fail to file your tax returns, or fail to pay your tax bill on time, the Department of Revenue may impose the following penalties until the balance is paid in full:
- Late filing of individual income tax return: 5% per month (25% max.) of unpaid tax at due date or extended filing date.
- Late payment or partial payment of income tax due: 5% of unpaid tax at due date or extended filing date.
- Late filing of sales tax return: there is a $25.00 or 10% of the tax penalty, whichever is greater.
Any corporate officer or employee with the duty to collect, account for or pay the taxes imposed on a corporation, or any member, manager, or employee with the duty to collect, account for or pay the taxes imposed on a limited liability company (LLC) may be held personally liable for the payment of taxes, penalties and interest. Furthermore, if you are purchasing an existing business is it important to be sure it is free and clear of any tax liabilities. You may be held liable for unpaid taxes.
Power of Attorney
An attorney or accountant may represent you regarding your tax issues with the state of Nebraska. Non-lawyers may be allowed to appear in a limited representative capacity. In order to be represented, written authorization must be filed with the Department of Revenue using a Power of Attorney, Form 33 or its equivalent.
Revocation or Suspension of Sales Tax Permit
Failure to comply with Nebraska state tax codes may result in the having your sales tax permit revoked or suspended. If the holder of the sales tax permit fails to collect, report or remit correct sales tax to the state, or fails to provide requested information for audit or does not disclose a crucial fact pertaining to sales and use tax liability, they will be given 20 days notice to appear at a formal hearing. At the hearing the permit holder must show a valid reason for failure to comply with state tax codes or lose the permit. The Department will only consider issuing a new permit once all tax liabilities, including penalties and interest, have been paid. The Department may also require sufficient security of up to three times the average period liability to ensure future compliance. Repeated offenders may be required to post up to five times the average reporting period liability.