Mississippi Payroll Tax Payment Plan Options
Checklist
What This Agreement Is
Mississippi Form 71-661 establishes a formal installment agreement between you and the
Mississippi Department of Revenue for individual income tax debt. This agreement allows eligible taxpayers to resolve outstanding tax liabilities through scheduled monthly payments rather than immediate full payment.
The installment agreement operates under Mississippi Code Section 27-7-53 and applies exclusively to individual income tax obligations. You must meet specific eligibility requirements and submit your request with your timely filed individual income tax return to qualify for this payment arrangement.
Eligibility Requirements Under Mississippi Code Section
27-7-53
Mississippi law establishes strict eligibility criteria for installment agreements. You qualify for a twelve-month agreement if your tax liability exceeds seventy-five dollars but does not exceed three thousand dollars.
Taxpayers with liabilities exceeding three thousand dollars qualify for a sixty-month agreement only if they have an approved installment agreement with the Internal Revenue Service for the same tax year. Both you and your spouse must have filed all required income tax returns for the past five years and paid all taxes due during that period.
Additional restrictions prevent taxpayers from entering consecutive agreements. You cannot have entered into such an arrangement during the previous five years to qualify.
How to Apply for Form 71-661
Complete Form 71-661 and attach it to the front of your individual income tax return when filing.
Submit the form by the original due date of your return or any approved extension deadline.
Provide accurate information, including your name, Social Security number, mailing address, and banking details. Enter the tax year for the request, the total amount owed, any payment submitted with the return, and the monthly installment amount you propose.
Payment Terms and Interest Accrual
The installment agreement requires equal monthly payments over the approved term
- Taxpayers who owe between seventy-five and three thousand dollars must pay the full
balance within twelve months from the date they filed the return.
- Those who owe more than three thousand dollars and hold an approved IRS agreement
receive sixty months to complete their payment obligations.
- Interest accrues at one-half of one percent per month on the unpaid balance throughout
the entire agreement period.
This interest rate took effect on January 1, 2019, and continues until you satisfy the full tax liability. Contact the Mississippi Department of Revenue before making your final payment to verify the exact remaining balance, including accrued interest.
Compliance Obligations During the Agreement
You must make each installment payment by its due date to maintain the agreement. Current tax obligations for subsequent years remain separate from your installment agreement and must be filed and paid on time.
Missing a scheduled payment or failing to pay current tax liabilities when due can result in termination. The Mississippi Department of Revenue may also cancel the arrangement if you provided inaccurate or incomplete information when requesting approval.
What Happens If You Default
The Mississippi Department of Revenue pursues collection actions when taxpayers default on payment arrangements or ignore outstanding tax debt. Tax liens may be filed against your property with the circuit clerk in your county of residence.
Liens secure the state’s interest in your assets and remain in effect for seven years with possible refiling. The Department of Revenue can levy bank accounts or other assets to satisfy unpaid tax liabilities.
Enforcement Procedures Under State Law
Collection procedures under Mississippi Code Sections 27-7-55 through 27-7-67 authorize multiple enforcement mechanisms. The state can issue warrants for collection and seize property for sale to satisfy unpaid liabilities.
These actions continue until you satisfy the full debt or establish an alternative resolution.
Enforcement escalates when taxpayers fail to respond to notices or refuse to address outstanding balances.
Critical Limitations and Restrictions
Form 71-661 applies exclusively to individual income tax liabilities under Mississippi Code
Section 27-7-53. Business entities cannot use this form to resolve employer withholding tax obligations or other business tax debts.
The form specifically requests individual taxpayer information, including personal Social Security numbers and spouse details. Do not file Form 71-661 if you currently maintain an active payment arrangement with the state.
Taxpayers in bankruptcy proceedings face restrictions under federal law and should contact the
Mississippi Department of Revenue before requesting a payment arrangement. The automatic stay provisions of bankruptcy law may void payment arrangements when you file for bankruptcy protection.
Steps to Maintain Good Standing
Track each payment you make to the Mississippi Department of Revenue with detailed records.
Document payment dates, amounts, confirmation numbers, and delivery methods for your records.
Verify that payments are credited correctly to your account by monitoring your balance. File all current individual income tax returns on time during the installment period.
Financial Changes and Reporting
Report significant changes in your financial circumstances to the state promptly. Missing scheduled payments or current filing obligations jeopardize your agreement status and trigger potential enforcement actions.
Maintaining accurate records protects you if questions arise about payment history or compliance with agreement terms. The Mississippi Department of Revenue reviews taxpayer compliance throughout the entire agreement period.
Facing State Enforcement or Payroll Tax Issues?
If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.
We help with
- State enforcement actions and notices
- Payroll tax debt review and resolution
- Penalty and interest reduction options
- Payment plans and compliance solutions
- Representation before state tax agencies
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