Mississippi tax payment plan for income tax and audits
The Department of Revenue for Mississippi offers Form 71-661 as an installment agreement. You send it with a return filed by its due date and $75 to $3,000 gets paid in 12 payments of equal size.
- A plan of 12 payments
- Ranging from $75 to $3,000
- Above $3,000, with an IRS plan
- Up to 60 months
- Interest charged for the plan
- 1/2% a month
- A plan for an audit
- 1/3 down, 6 months
The request is included in your return
In Mississippi, the order is not the usual one. The DOR individual income tax FAQ says the installment agreement form must be attached to a return that is filed by its due date. In many states you may wait for a bill before asking, but that is not allowed here.
You qualify only if, filing jointly with your spouse, you filed every required return and paid all taxes during the last five years. You also cannot have used another installment agreement during those five years.
Two plan sizes are set out in Form 71-661
The Form 71-661 instructions describe two options:
- For tax from $75 up to $3,000, pay the balance off in 12 equal monthly payments.
- When tax is over $3,000 and you hold an IRS installment agreement covering that same year, the plan may last up to 60 months. You must attach a copy of the IRS approval notice.
- It asks for the total you owe, what you include with the return and the monthly payment you will make.
What does the plan cost while you are paying it?
Interest of 1/2% a month keeps growing while your agreement is in place. The form asks you to contact DOR and get an exact payoff figure before your last payment, so the interest comes out right. Paying late brings a penalty of 1/2% a month. The FAQ explains that the penalty cannot go past 25% of the tax.
Make sure that each payment is made on time. The agreement may end if a payment installment is late or if another tax stays unpaid past its due date. A bankruptcy filing can void the plan too and DOR wants to know right away.
Do you owe money from a business audit?
Audit bills follow a different rule. After you accept the audit result, are you unable to pay? The business tax FAQ for DOR says the standard agreement begins with one third down. Equal installments spread over six months cover the remaining balance.
Assessment notices follow if you neither pay nor appeal. From the notice date you have 30 days to pay or appeal.
If a Mississippi tax debt goes unpaid
According to the business FAQ, DOR records a tax lien once a debt is final. Legally, it is a claim on the property you own. Recording happens in the circuit clerk’s office for every county where you own property. After that, a warrant can be issued to seize any other assets, along with wages and bank accounts. Your employer may also be ordered to garnish your pay and that keeps up until you pay off the debt. Officers of a company can be held personally liable when that company leaves tax unpaid.
A business can put its permits at risk as well. A Notice of Intent comes first, according to the DOR suspension and revocation page. After that, you have 30 days to ask the Review Board for a hearing.
Holding both plans at the same time, one from the IRS and one from Mississippi
The two plans are linked by one thing: an approved IRS agreement is what opens Mississippi’s 60-month option. That said, two contracts and two payments remain. If you miss either one, that can undo the Mississippi plan.
Nearby states
Do you owe money to DOR and the IRS?
Besides more than $3,000 owed to Mississippi, do you owe the IRS? A free call lets a licensed tax pro arrange the IRS plan that makes Mississippi’s 60 months available.
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