D.C. OTR collections: liens, levies, payment agreements, and Clean Hands.

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

I take on the matter when a D.C. balance blocks a license, permit, contract, or grant through Clean Hands, because noncompliance can rest on a debt, a missing return, or a missing registration, the Code counts a majority owner as an applicant, and each problem has its own fix. I take it on 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.

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. A taxpayer can also run a Clean Hands check on MyTax.DC.gov alone and resolve a simple issue there, such as a small debt or a missing account registration.