If the Georgia Department of Revenue (“DOR”) believes you owe additional taxes, often after receiving information from a third party, they may send you a Notice of Proposed Assessment. This notice outlines what the state believes you owe, but it’s not a final bill. At this point, the assessment is proposed, not final, and you still have time to contest the adjustments.
It’s important to look into your options quickly so you can either contest the amount or set up payment arrangements. To get help now, contact us at Wiggam Law today.
Key Takeaways
- The DOR may assess additional taxes if they audit you, receive information regarding unpaid income, or learn about misclassified transactions.
- If this happens, the DOR will send a notice of proposed assessment.
- You have the right to protest the assessment within 30 days.
- In addition to appealing online, submit any documentation that supports your protest.
- If you cannot pay in full, you may qualify for a payment plan or offer in compromise.
What is a Notice of Assessment?
A Notice of Proposed Assessment is a letter sent by the DOR when they receive information indicating that you owe more in taxes than previously thought. The notice includes the new tax amount you owe, as well as any interest or penalties assessed.
It also outlines your payment options and appeal rights.
Why You May Receive a Notice of Proposed Assessment
There are several reasons that the DOR may believe you owe more money, including:
- They audited your tax return and found additional information that does not reconcile with your original return. Or they reclassified a deduction on your business return.
- They received information from the IRS that shows you have additional income you did not report to the government. For example, W-2s or 1099s that weren’t included on your original state or federal return.
- The IRS made an adjustment to your federal return and sent a notice to the GA DOR to make a similar adjustment.
- You didn’t file a return, and the DOR is proposing a tax assessment against you related to the income you received for the year in question.
Understanding Your Notice of Proposed Assessment
Before you decide how to proceed, it’s important to know exactly what’s in your notice and what it means. As you review your notice, look for these components to better understand your options and next steps:
- Letter ID: This is included on all correspondence from the DOR, and it makes it easier to learn more about the letter and your response options. You can also reference the letter ID when calling the DOR.
- Tax type and year: Find out what tax year they received information for and which types of taxes are being added to your tax bill.
- Reason for the assessment: Your notice should also tell you why they are assessing additional taxes, giving you a starting point for your investigation.
- Amount due: Look for the total amount they claim you owe, including penalties and interest.
- Payment voucher: The letter should also include a payment voucher for those who do not wish to protest the assessment.
The Notice of Proposed Assessment also outlines how to pay, payment options, what happens if you ignore the notice, and your rights to protest or contest the adjustment. How you proceed depends entirely on whether or not you believe the tax is accurate.
If you agree and want to pay
If you agree with the notice and are able to pay, you can pay the balance with the attached payment voucher or through the Georgia Tax Center. If you agree with the balance but cannot pay in full, you can look into other payment options offered by the DOR.
- Payment plans allow you to split up what you owe into as many as 60 monthly payments. The minimum monthly payment is $25, and there’s a $50 administrative fee for auto-draft payment plans and a $100 administrative fee for manual payments. With this payment option, penalties and interest continue to accrue each month.
- Offer in compromise is a tax settlement available to Georgia taxpayers whose financial status prevents them from paying in full. You can apply online via the Georgia Tax Center or submit your required forms via mail.
If you want to seek relief from the penalties added to your tax assessment, look into penalty relief. You can submit a penalty waiver if you have a valid reason for being late with your taxes or failing to report accurate information. However, if you are requesting penalty abatement and protesting the assessment, note that requesting penalty relief does not stop the 30-day deadline for submitting your appeal/protest.
If you disagree and want to appeal
If you disagree with the notice, you will need to file a protest or provide documentation supporting your position. Most taxpayers protest online via the Georgia Tax Center, but you can also print out Form TSD-1 and submit it by mail.
TSD-1, Protest of Proposed Assessment or Refund Denial, requests information on why you are protesting the assessment. Be ready to give a detailed explanation regarding your disagreement with the DOR’s proposed assessment, and don’t forget to include any necessary supporting documents that may strengthen your claim.
For example, if you made estimated payments that are not accounted for in the assessment, attach proof of payment. If they are claiming you had unreported income, provide proof that the income calculation was incorrect or that the income referred to was already in your original tax return. Note that you only have 30 days to protest the proposed assessment.
Consequences of Ignoring a Notice of Proposed Assessment
Handling tax issues is stressful, and some taxpayers’ approach is to ignore communication from the DOR until they are forced to respond. Unfortunately, this can have serious consequences. Once the 30-day window to protest closes, the DOR formally assesses the proposed taxes. They will then send you an Official Assessment and Demand for Payment.
From there, their efforts to collect what you owe are the same as those for all other delinquent taxes. If you continue to ignore their letters and requests for payment, they will move forward with a Notice of State Tax Execution. This is a lien on all of your assets. Not only do you then have to pay the taxes to lift the lien, but you’ll also have to pay a fine and a penalty.
The DOR may garnish your wages or levy your assets if all other collection efforts fail.
Notice of Proposed Assessment Case Studies
Here are some sample scenarios of when taxpayers may receive a proposed assessment.
- Client A receives freelance income but forgets to include the amounts received as reported on Form 1099 on her tax return. The IRS discovers this in an audit and sends CP2000 to inform them of proposed changes. The IRS assesses additional tax related to the unreported income. That information is shared with the DOR, which then sends a Notice of Proposed Assessment.
- Client B owns a restaurant and underreports its dine-in and delivery sales. As a result, they collect and pass through the incorrect amount of sales tax. Eventually, the DOR catches the error, leading to a Notice of Proposed Assessment.
- Client C is a commercial real estate owner who classifies a repair as a capital improvement. Repairs get deducted the same year you incur the expense, while capital improvements must be depreciated over time. When this is discovered, the DOR sends a Notice of Proposed Assessment.
Is It Time to Talk to a Tax Professional?
For some people receiving a Notice of Proposed Assessment, the news isn’t a huge surprise. They may know that they underreported their income. Or perhaps they already received CP2000 from the IRS and anticipate that the state tax authorities aren’t far behind. If that’s the case, you may just want to pay in full or contact the DOR to set up payments.
However, if you feel blindsided by the notice and you have no idea why you received it, it may be time to talk to a tax professional. A tax professional can provide much-needed guidance and support—that’s especially critical if your new assessment is a significant amount of money or the result of trust fund tax liability.
In both of these cases, you could be on the hook for a substantial amount of money. You should protect your best interests with an attorney. The same is true for those in high-risk industries that are often investigated by tax authorities, including restaurants, contractors, and retailers.
If you opt to protest the assessment, working with a tax professional allows you to submit the strongest protest possible. The more evidence and documentation you have to support your claim, the better your odds of a positive outcome are.
Reach Out to Wiggam Law Today
You only have 30 days from the date of your letter to dispute the amount. You must talk to a tax professional now to protect your right to appeal or contest and figure out the best path forward for your needs. The team at Wiggam Law can help you better understand your situation and decide how to move forward. Call us at (404) 233-9800 or use our online scheduler to set up a confidential consultation.
Georgia DOR Notice of Proposed Assessment FAQs
What happens if I miss the 30-day protest deadline?
The proposed changes become permanent, and the amount listed in the notice becomes due immediately. The Georgia DOR will then pursue payment.
How do I file a protest with the Georgia DOR?
You can file your protest online via the Georgia Tax Center or submit TSD-1 and any supporting documentation to the Georgia DOR.
What if I already resolved the issue with the IRS?
Your federal tax debt and your state tax debt are separate issues. Even if you have squared away the situation with the IRS, you should follow the protest process with the Georgia Department of Revenue.
What documents should I include in my protest?
Any information you have proving that their assessment is inaccurate may help your claim. You may want to include bank statements, pay stubs, payment records, and receipts, depending on why you believe their numbers are inaccurate.
Sources:
https://dor.georgia.gov/taxes/audits/what-do-if-you-receive-proposed-assessment
https://dor.georgia.gov/payment-plans
https://dor.georgia.gov/penalty-and-interest-rates
https://dor.georgia.gov/offer-compromise
https://dor.georgia.gov/notice-proposed-assessment-letter
https://dor.georgia.gov/tsd-1-protest-proposed-assessment-or-refund-denial
https://dor.georgia.gov/tsd-3-request-penalty-waiver
https://www.law.cornell.edu/regulations/georgia/Ga-Comp-R-Regs-R-560-1-2-.02
https://www.irs.gov/individuals/understanding-your-cp2000-series-notice
https://law.justia.com/codes/georgia/title-48/chapter-2/article-2/section-48-2-43/
