The North Carolina Department of Revenue has launched a new program to help individuals pay unpaid income taxes. The program is called the “Individual Income Tax Debt Payment Program.” It is designed to help individuals resolve unpaid taxes and get back on their feet financially by waiving certain penalties and fees and offering payment plan options.
Here is how it works: Any individual taxpayer with unpaid income taxes from prior years must pay all unpaid taxes and interest for all years. If the taxpayer does so prior to April 30, 2012, the Department of Revenue will waive all penalties and fees except the civil fraud penalty. Often, these unpaid fees and penalties constitute a significant portion of the tax debt so the waiver of those fees and penalties could represent a substantial benefit for the taxpayer. The program is open to any taxpayer who has properly filed his or her tax returns with Department of Revenue and has received a notice for unpaid taxes prior to January 1, 2012. A taxpayer who has not filed a return, does not currently have an outstanding tax liability or is the subject of an ongoing criminal investigation or prosecution is not eligible.
Note that the program does not apply to other taxes (like sales or withholding taxes) and that the taxpayer may not receive a credit against the unpaid taxes and interest for previously paid penalties. In other words, the program only waives currently unpaid fees and penalties but does not apply to penalties previously paid. Also note that the taxpayer cannot use his or her 2011 refund as part of the payment.