TENNESSEE DEPARTMENT OF REVENUE BACK TAX RELIEF

Get started resolving your state tax liabilities using the information below.  If you still need help, reach out to us using the contact form to the right of this page.

Taxpayer Bill of Rights – short, to the point, not very useful when you need to know how to fix your back tax problem.

TN-DOR Monthly Payment Plan

Installment Payment Agreement basics

  • A tax lien will be filed.
  • Your monthly payment will, in most cases, be based on ability to pay according to the TN-DOR, and will not exceed 60 months.
  • Monthly payments must be at least $50 and will be taken via direct debit from your bank account.
  • Expect to complete a financial statement form to be submitted with your Installment Agreement request.
  • Expect to provide documents supporting the information on your financial statement.
  • Expect to sign an authorization to release documents to the Department of Revenue from a third party such as your bank.

State of Tennessee Offer in Compromise

Similar to the old IRS Offer in Compromise rules, Tennessee uses 60 months to calculate your ability to pay monthly.  That’s unfortunate.

Net Monthly Household Income x 60 Months

Add this to net value of your assets and you have the basic OIC formula for Tennessee.

More stuff to know about the OIC:

  • Expect to submit financial statement forms and supporting documentation.
  • Expect to sign an authorization to release documents to the Department of Revenue from a third party such as your bank.
  • If you’ve also submitted an OIC to the IRS, expect to provide a copy to TN-DOR.
  • Submission of an Offer in Compromise will not halt collection activity.
  • If you have an Installment Agreement and submit an OIC, you will need to keep making the payments. 
  • If accepted, payments during the review of your OIC will be applied to the compromised liability.
  • If denied, any payments made during the review of your OIC will not be returned to you.
  • If accepted, you must remain current and compliant with all tax responsibilities for 5 years or your Offer will be voided and collection of the total balance will resume.
  • If denied, there is no Appeal process.

Penalty Relief

Good news, at least on the surface.  The TN-DOR now has a Penalty Waiver form.  You may have penalties removed if you meet 1 of 2 conditions.

  • The tax delinquency was the result of good and reasonable cause (no willful disregard of the law or gross negligence involved)
  • Good filing history for at least the prior two years

    • The Petition for Waiver of Penalty form states:

    A penalty can be waived if it is determined that the tax delinquency or deficiency is the result of good and reasonable cause. Good and reasonable cause may include a good filing history for at least the prior two years. The failure to file or pay cannot be a result of gross negligence or willful disregard of the law (see Tenn. Code Ann. § 67-1-803).

    page last reviewed 10/28/2021





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