2022 taxes: what to do if you can’t pay?

Published Oct 3, 2022 2:44 PM

Unemployment, loss of income, divorce, etc. These life fluctuations can plunge some taxpayers into a state of great financial instability, to the point where they are unable to pay taxes, fines or related interest arrears.

In this period of high inflation, household budgets are under pressure. for Homeowners subject to property tax is a cold shower . In principle, they have until October 17 to pay this local tax, which has risen sharply this year. What saves some unpleasant surprises.

However, in some specific cases, management can show flexibility and sometimes even go so far as to erase part of the debt. How to get the payment deadline Even a free discount? What taxes are included?

1. Delay request in case of temporary difficulties

If you have temporary difficulties paying local taxes (property tax and residence tax), or Income tax Exceptionally, you can request a payment delay from the tax authorities.

What about the real estate wealth tax? “It is possible to ask for a delay in the payment of all taxes, particularly international financial taxes, and to get a delay. But, in all cases, the amounts involved and the taxpayer’s financial situation, behavior and history are taken into account,” explains Philippe de Guinero, assistant tax attorney At Eversheds Sutherland in Paris.

“From experience, the spread of payments can reach 36 months for IFIs, and rarely exceeds,” adds the legal professional, whose clients are made up of business leaders.

Whatever tax is involved, it is best to act quickly. “It is best to submit your application as soon as you receive your tax notice,” states the Department of Finance in its Bercy Infos Particuliers educational letter dated September 27. Do not wait until your financial situation deteriorates further, otherwise you will be subject to severe late penalties.

You can perform the process online by logging into your private space and accessing your secure messaging system. Select “Write to management / I have a problem with paying tax / I find it difficult to pay”.

It is also possible to submit your application to your general financial center office or mail it.

It is recommended that your application be accompanied with Questionnaire Form 4805-SD and the corresponding supporting documents.

Requests for payment deadlines or tax deductions are made outside of any tax suit. You are not arguing about the tax due. Therefore, it is a simple gracious appeal subject to the goodwill of the tax authorities, which is determined “on a case by case” according to the personal situation of the taxpayer.

In practice, the administration will take into account periods of unemployment and other life accidents (spousal death, separation, disability, illness, accumulation of arrears or recalls after a tax audit).

If the tax authorities do not respond within the two-month period, the application will be considered rejected. This period is extended to four months if the complexity of the application justifies it. In the event of a positive response, a schedule will be established.

At the end of this first step, if you nevertheless believe that your application has not been satisfactorily handled, you may contact the department’s tax adjuster.

2. Impossibility to pay: get tax deduction

In extreme cases, even by getting a delay, the debtor may find himself unable to pay. He can then submit a free application for a partial or full tax reduction. This must be accompanied by the same supporting documents as those required for the delay request.

A request for a discount may relate to the following taxes:

· Income tax

Housing tax and contribution to public audiovisual aids (under repeal)

property tax

Penalties and interest for late payment of one of these taxes

“It is also possible to get free fines deductions after a tax audit,” identifies Philippe de Guinero.

On the other hand, it is not possible to get a discount on registration fees (inheritance fees for example), nor on real estate wealth tax (If I).

The tax department will examine each file taking into account the true payment capabilities of the taxpayer and family members. It will also check that you have not filed for bankruptcy to avoid paying taxes.

“The chances of getting a free deduction or a tax cut are negligible if your situation is justified. When it is justified, management can be vigilant”, considers Philippe de Guinero. The attorney recommends taking the time to call or meet and chat with tax officials, especially when the amounts involved are large.

Remittance requests last year accounted for 11% of all complaints received by the Revenue Authority, according to the report submitted to Parliament on remittances and transactions for the year 2021, published by the Ministry of Finance.

During this period, about 345,000 applications were processed by the services of the Directorate General of Public Finance (DGFiP). On an annual basis, their number continues to decline significantly (-26.3% in 2021 after 38.5% in 2020). This decline reflects the sharp decline in the number of incoming orders (-20% in 2021).

For individual taxpayers, two main factors explain this sharp decline. construction tax freeze With regard to income tax, it eased the tax burden on families and reduced the risk of payment accidents.

The phasing out of the housing tax, which began in 2018, has actually led to a reduction in applications. Those interested in applying for free deductions, with housing tax-related applications representing the weighting share of free applications received and processed each year by DGFiP,” he notes Annual Report for Rebates.

It is still too early to tell whether the deteriorating economic situation will have an impact on the number of applications submitted to management in 2022, but the initiative can still be taken.

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