D.C. tax collections
D.C. OTR collections: liens, levies, and payment agreements.
A D.C. OTR collection matter is what follows a final District tax balance: the Office of Tax and Revenue's Collection and Enforcement Administration works to collect it by lien, levy, seizure, refund offset, and referral to collection agencies. A final District tax balance over $1,000 can also block a license or permit under the Clean Hands rules, covered on D.C. Certificate of Clean Hands. On this side of the dispute, the taxpayer's tools include a payment agreement, a release of levy, and a written request for reconsideration.
Mr. Powell represents individuals and closely held businesses in District of Columbia collection matters with OTR: levies, extended payment plans, and trust fund assessments against officers and principals. He works from 1629 K Street NW, Suite 300 in Washington, DC, and handles IRS and U.S. Tax Court matters nationwide from that office. State-law matters are limited to the District of Columbia and Maryland.
The D.C. Code sections and the OTR and MyTax.DC.gov pages described on this page were checked on code.dccouncil.gov, otr.cfo.dc.gov, and mytax.dc.gov on September 23, 2026, and the page was revised on November 3, 2026, when its Clean Hands material moved to its own page. The notice in hand and OTR's current instructions control over this summary. This page is not legal advice.
Collection begins when the balance is final.
A proposed assessment, the notice that can still be protested, is covered on the D.C. Office of Tax and Revenue attorney page. Under D.C. Code section 47-4312, OTR sends a final assessment when no timely protest is filed, and a final order of the Office of Administrative Hearings has the same effect, after which OTR may undertake any lawful collection efforts.
OTR's Notice of Tax Due page says that if full payment is not received within 15 days from the notice date, OTR sends a Notice of Enforcement by certified mail and initiates enforcement action. OTR's collection FAQ adds a collection fee of 10 percent on balances unpaid for 90 days or more, and says a taxpayer may avoid the fee by paying within 30 days of a Notice of Enforcement Action.
Find the assessment date first, because that date starts the collection clock. D.C. Code section 47-4302 allows a tax to be collected by levy or by a court proceeding only if the levy is made or the proceeding begun within 10 years after the assessment. The same section allows that period to be extended if the Mayor and the taxpayer both consent in writing before it expires, and allows further written extensions made before an extended period ends. OTR's payment agreements include that extension, so signing a plan can lengthen the time OTR has to collect. The date printed on each OTR notice controls, and this page does not calculate any deadline.
Official source: D.C. Code section 47-4312, protest of assessment
Official source: OTR, Notice of Tax Due
Official source: OTR, Collections and Audit FAQs
Official source: D.C. Code section 47-4302, limitation on collection
Enforcement actions
What OTR can do to collect a final balance.
Tax lien
OTR says a tax lien may be filed with the Recorder of Deeds if a taxpayer neglects or refuses to pay within 10 days after receiving a Notice of Tax Due and a demand for payment. Under D.C. Code section 47-4421 it reaches all property and rights to property, with the same effect as a lien created by judgment. Under section 47-4423, a lien for sales tax or withholding tax is valid against a purchaser, a holder of a security interest, a mechanic's lienor, or a judgment lien creditor regardless of when it is filed, except against a bona fide purchaser for value of homestead real property.
Levy
OTR says it may seize wages, bank accounts, accounts receivable, and other money held by third parties and owed to the taxpayer. D.C. Code section 47-4471 allows a levy when a tax is not paid within 10 days after notice and demand. The levy must follow a written notice of the intention to levy, except a levy on an account at a third-party financial institution or a levy when OTR finds that collection is in jeopardy. A levy on wages is continuous until it is released.
Seizure and sale
OTR says it may seize property such as a residence, business property, or an automobile and sell it at public auction if the tax remains unpaid. Under D.C. Code section 47-4474, the taxpayer may pay the amount due and the expenses at any time before the sale and have the property restored.
Liability offset
OTR cross-matches liabilities against pending District or federal tax refunds through the Treasury Offset Program, and it offsets funds from District government contracts for work performed or services rendered. D.C. Code section 47-4431 authorizes the credit of an overpayment against a tax liability, with District taxes first in its order of priority.
Sales tax certificate revocation
OTR says it may revoke a sales tax certificate in lieu of full seizure of a business. OTR says the owner is then prohibited from conducting sales, and that in most cases the issuing agencies may revoke the business's other District licenses under the Clean Hands Act.
Trust fund recovery assessment
OTR treats sales tax and employee withholding collected by a business as trust funds, and says the individuals responsible for the business's financial decisions may be held personally liable when they are not remitted. D.C. Code section 47-4491 makes an officer, director, general partner, or similar principal liable for a penalty equal to the unpaid sales or withholding tax, requires written notice at least 30 days before the penalty is imposed, unless collection is in jeopardy, and bars it when reasonable cause is established.
Collection agencies
OTR names Harris & Harris and Pioneer Credit Recovery as the collection agencies it uses, and says payments on enforced collection cases still go to OTR at PO Box 37559, Washington, DC 20013. D.C. Code section 47-4405 requires a written notice by certified or registered mail, and 30 days from mailing to pay in full, before an account is referred.
Official source: OTR, Enforcement Actions
Official source: D.C. Code section 47-4421, lien for taxes
Official source: D.C. Code section 47-4423, lien priority
Official source: D.C. Code section 47-4471, distraint
Official source: D.C. Code section 47-4474, redemption of property
Official source: D.C. Code section 47-4431, refund offset
Official source: D.C. Code section 47-4491, personal liability for failure to collect or pay tax
Official source: D.C. Code section 47-4405, collections through third party contractors
A payment agreement is a courtesy with written terms.
OTR's Installment Agreements page says installment agreements are not required by law and that OTR may extend them as a courtesy. Missing returns must be filed first.
Self-service. Eligible individuals and businesses may set up a plan on MyTax.DC.gov when it runs 24 months or less and the balance is under $100,000. OTR lists conditions that bar an online plan, including a balance already in an active plan, two or more cancelled online plans for the same debt, an active bankruptcy, garnishment, settlement, or offer in compromise, a linked liability such as an Officer Assessment, and unfiled returns. The MyTax.DC.gov user guide adds that a submitted plan cannot be changed or cancelled online.
Terms. OTR requires ACH debit and a 10 percent down payment, applies payments to the oldest period first, and applies District and federal refunds to the balance until it is paid in full. The taxpayer agrees to extend the statute of limitations for collection until the final payment. Interest accrues throughout the plan. OTR files a lien automatically when the balance is greater than $25,000, or, for a smaller balance, when the plan runs longer than 12 months.
Extended plans. A balance over $100,000 or a plan longer than 24 months requires a request for an extended payment plan on MyTax.DC.gov. OTR asks an individual for Form PA-1, a Collection Information Statement signed under penalties of perjury, with bank statements, pay stubs or a profit and loss statement, and the latest federal return. For a business, OTR's list includes Form PA-2, a Form PA-1 from each owner, six months of bank statements, and the Trust Fund Recovery Assessment interview form.
Keeping it. OTR says a late or missed payment, a failure to provide requested financial information, or a failure to file and pay future taxes on time can cancel the agreement. D.C. Code section 47-4478 requires OTR to release a levy when the taxpayer has entered into an installment agreement, unless the agreement provides otherwise or release would jeopardize the District's status as a secured creditor, and when OTR determines that the levy is creating an economic hardship due to the taxpayer's financial condition.
Official source: OTR, Installment Agreements
Official source: MyTax.DC.gov, How to Request a Payment Agreement
Official source: OTR Form PA-1 (March 2024)
Official source: D.C. Code section 47-4478, release of levy
Disputing a collection decision.
OTR's Collection and Enforcement Administration reconsiders its decisions on written request, such as the denial of a penalty or interest waiver, the rejection of an offer in compromise, or an objection to a refund intercept or offset for student loans or child support. The request states the facts, the applicable law, and the relief requested, and goes by MyTax.DC.gov Web Message or by mail.
OTR says it responds within 30 calendar days, allows 30 days from the response date to request reconsideration with additional documentation, and answers that request within 120 days. After a denial, OTR describes a Taxpayer Advocacy Request to its Office of the Taxpayer Advocate, or an appeal to the Superior Court. D.C. Code section 47-3303 counts the six months for that appeal from the date of the assessment, not from OTR's answer, and requires the tax, penalties, and interest to be paid to the D.C. Treasurer first. The statute treats the mailing of a statement of taxes due as notice of assessment. The date printed on the notice controls, and this page does not calculate any deadline.
OTR states that protests of Officer Assessments and Non-Filer assessments go to the Office of Administrative Hearings within the time stated in the Notice of Proposed Assessment. For a refund offset for child support, a federal student loan default, or an unemployment compensation overpayment, D.C. Code section 47-4433 requires written notice before the offset is disbursed and allows a protest at the Office of Administrative Hearings within 30 days of service of that notice. D.C. Code section 47-4404 allows the District to compromise a tax when there is reasonable doubt as to liability or collectibility.
Unpaid real property tax follows a separate path: OTR's Real Property Tax Lien Sale and Resources page refers to the annual real property tax sale and lists the Real Property Tax Ombudsman for help with a tax sale.
For a federal balance, see IRS collections attorney.
Official source: OTR, How Do I Request Reconsideration of a Decision
Official source: D.C. Code section 47-3303, appeal from assessment
Official source: D.C. Code section 47-4433, refund offset notice and protest
Official source: D.C. Code section 47-4404, compromise of tax
Official source: OTR, Real Property Tax Lien Sale and Resources
When I take on a D.C. collection matter.
I take on the matter when a levy has issued, to establish whether release is available under section 47-4478 and what agreement OTR will accept. I take it on when a business owes withholding or sales tax: those are trust funds, the lien for them arises on the due date of the return, and the officers who control the money can be assessed personally.
I also take it on when the balance itself is wrong, whether it rests on an estimate for a period OTR treats as unfiled, a payment that was not credited, or an assessment whose protest window may have closed. The first question there is which forum is still open. Under D.C. Code section 47-4312, a protest to the Office of Administrative Hearings must be filed no later than 30 days after the proposed assessment is sent, and filing it makes that office the exclusive forum for all challenges to the proposed assessment. The statute keeps an appeal to Superior Court under section 47-3303 as an alternative to a protest, and that appeal requires payment first.
A taxpayer can request a payment agreement on MyTax.DC.gov alone when every return is filed, the balance is under $100,000, a plan of 24 months or less is affordable, and none of OTR's ineligibility conditions applies.
Questions
Common questions.
Does D.C. OTR have to send notice before a levy?
Yes, though the kind of notice depends on the levy. D.C. Code section 47-4471 allows a levy when a tax is not paid within 10 days after notice and demand, and requires written notice of the intention to levy, given in person, left at the dwelling or usual place of business, or mailed to the last known address. The notice of intention is not required for a levy on an account at a third-party financial institution. When OTR finds that collection is in jeopardy, the statute allows a demand for immediate payment and a levy without the 10-day wait or the notice of intention.
How do I set up a payment plan with D.C. OTR?
OTR lets eligible individuals and businesses create a plan on MyTax.DC.gov when it runs 24 months or less and the balance is under $100,000. Missing returns must be filed first, and OTR requires ACH debit, a 10 percent down payment, and agreement to extend the statute of limitations for collection. A larger balance or a longer plan requires an extended plan request with Form PA-1, and for a business Form PA-2. OTR files a lien automatically when the balance is greater than $25,000, or when a smaller balance is on a plan longer than 12 months.
Can I dispute a D.C. tax balance once it is in collection?
It depends on what is disputed. A proposed assessment can be protested at the Office of Administrative Hearings within the time printed on the notice, and under D.C. Code section 47-4312 a timely protest makes that office the exclusive forum for the challenge. A Superior Court appeal requires paying the tax, penalties, and interest first and filing within six months, counted from the date of the assessment under D.C. Code section 47-3303 for income and franchise taxes, and from the date of the final determination under section 47-2021 for sales tax. For a collection decision, such as a denied penalty waiver, OTR publishes a written request for reconsideration, followed by a Taxpayer Advocacy Request. The date printed on the notice controls.
Related pages
Related D.C. and IRS collection resources.
- D.C. Certificate of Clean HandsWhy a certificate is denied and how a Notice of Noncompliance is cleared.
- D.C. Office of Tax and Revenue attorneyAudits, proposed assessments, and OAH protests.
- Washington, DC tax attorneyIRS and U.S. Tax Court matters from the Washington, DC office.
- Maryland tax attorneyMaryland state tax controversies.
- IRS collections attorneyFederal liens, levies, and payment plans.
- IRS levyFederal wage and bank levies.
- Trust fund recovery penaltyThe federal counterpart for unpaid payroll trust fund taxes.
- IRS Form 433-A and 433-BThe federal Collection Information Statements.
- Practice areasThe firm's federal, D.C., and Maryland scope.
Send the letter code and the date printed on it.
Tell me the name of the OTR notice, the date printed on it, and the tax type and periods. Send only a high-level summary.
Requesting a consultation does not make Mr. Powell your lawyer, provide legal advice, or protect a deadline.
Law Office of Alexander Powell, PLLC. 1629 K Street NW, Suite 300, Washington, DC 20006.