Taxpayers who owe state income or sales and use tax to the Department of Revenue need to be aware of its 30-Day Rule.
This rule applies to Taxpayers who have failed to file and pay tax due and have received a notice of deficiency for failure to pay the tax. Once that notice has been mailed, the Taxpayer has 30 days from the date of the actual notice (not the date it was received) to either pay the tax, including applicable penalty and interest, or protest the notice of deficiency.
If the Taxpayer fails to respond within the time allotment, the 30-day protest period is no longer applicable, the Taxpayer’s appeal rights are gone, and the tax must be paid.
Another measure the DOR employs to encourage payment of its taxes is the right to assert s 150% penalty against responsible third parties. The Department uses this as a collection tool when other methods of collection have failed.
Corporate officers and members of a partnership or LLC who willfully fail to collect, account for, or pay taxes due, or who willfully attempt to evade taxes are subject to, in addition to the normal penalties prescribed by law, a penalty equal to 150% of the total amount of the tax.
The deficiency can be protested, through the regular channels of the 30-day notice rules. Filing of bankruptcy does not preclude the Department from assessing the 150% penalty against the responsible party, and is not usually dischargeable.
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