Liens and Installment Agreements
Generally, one option available to a taxpayer to resolve a balance due is to enter into an installment agreement. If the balance exceeds $25,000 or will take longer than five years to resolve, we will file a Notice of State Tax Lien to secure the state’s interest in any real property held in the county where the lien is filed. If the balance is under $25,000 and would be paid within a five year payment plan, we will generally not file a lien on the outstanding balance as long as the taxpayer stays in compliance with the installment agreement. One condition for an installment agreement is that the taxpayer incurs no new liability during the installment agreement period. If a new liability arises or the taxpayer fails to make the agreed upon payments, then we will cancel the installment agreement.
If the taxpayer wants to continue the installment agreement after defaulting, and the new liability puts the balance due on the account over $25,000 or would require the repayment period to exceed five years, we will file a Notice of State Tax Lien.
Also, if the account reflects a history of noncompliance, even though the balance due may be less than $25,000 or the repayment plan is within the five year period, we may file a lien as a condition of continuing the installment agreement. A history of noncompliance includes either a combination of three or more broken promises (non-payments/dishonored payment) or three continuous accruals of additional liabilities during the life of the existing Installment agreement.