[CPAoneday]

Question I’ve been dreading for a while.

I live in VA and I owe a large amount of back taxes to the state for the prior years, around 8k (single mother working in service industry, had no extra money to pay taxes as they come due; please don’t judge too harsh). I put myself through school, got my undergrad and found a good job. I’m currently on a payment plan and make monthly payments to the state. By the time I’m done with exams, I’ll still owe about 7k. Will the state board deny me the license? Did anybody have similar experience? Would a moral character letter from my CPA supervisor help? I’m really trying to turn my life around, that’s why I was studying so hard for my license while working full fime and haveing a child on my hands. I really contemplating getting a personal loan and pay the full amount but that would be paying interest on top of interest…

Newbie
FAR oct 2016 working on it
REG ??
BEC ??
AUD ??

[jenpen]

Have you looked at your state license application? For Illinois, if you marked “yes” to something, you were then able to give an explanation. I would think (though of course, I don't know for sure) that as long as you are on a payment plan and are making regular payments you would be fine. I would maybe think about calling your licensing office and get a more accurate answer.

AUD - 56 - 68 - 61 - 9/8/16
REG - 75
FAR - 7/15/16
BEC - TBD

Wiley CPAexcel and NINJA 10 Point Combo

[CPAoneday]

Jennifer, thank you for your respond. I checked the VA application. They only ask about felonies and other convictions, which I don’t have.

Newbie
FAR oct 2016 working on it
REG ??
BEC ??
AUD ??

[jenpen]

Oh well that's nice! I know Illinois asked about if you were delinquent on tax returns or something like that.

AUD - 56 - 68 - 61 - 9/8/16
REG - 75
FAR - 7/15/16
BEC - TBD

Wiley CPAexcel and NINJA 10 Point Combo

[PJ]

I would imagine the fact that you are on a payment plan with the state would help you. You aren't just ignoring the owed taxes and praying that they will disappear. I suspect you'll be OK.

Also, maybe just call them and explain your situation and see what they say.

[TommyTheCat]

i agree with PJ. If you are a payment plan the IRS doesnt consider your taxes to be outright delinquent. I suspect it wont be an issue.

[alloverit]

Since you've filed the tax returns there should be no problem. The fact that they're not fully paid shouldn't be an issue.

While I like the advice about calling your state board, you might consider doing so anonymously…meaning there's no reason to create an issue if there isn't one. Consider this:

A guy I worked with a few years ago had some silly judgment against him for $110 that he didn't actually owe (according to him, anyway). He made the mistake of asking about it for himself and while he did get licensed, it was a huge amount of headache because it was financial in nature. Ultimately, he got his license because A) it wasn't a criminal offense and B) the company who reported him couldn't be contacted for follow-up.

But he made a huge mistake bringing it up (in his name). His licensing was delayed about 4-5 months. When I filled out my application for license, there was nothing like that on the application…just stuff about arrests/crimes, etc. and if you are involved in public accounting.

So ultimately, if it is an issue you're going to have to disclose it….just don't CREATE an issue.

[CPAoneday]

Thank you, everybody! Alloverit, I actually had the same concern about making it a big issue out of it when it might not be. I might call and see if I can get some info without giving my name. I guess, at this point, I’ll keep making payments and hope for the best.

Newbie
FAR oct 2016 working on it
REG ??
BEC ??
AUD ??

[oisbuddy]

You will be fine. This is a funny area really. The state CPA societies and the IRS and state taxing authorities are all different entities, and I guarantee you that the IRS or state revenue agencies cannot divulge a single piece of your tax information to the state CPA societies without your consent/power of attorney signoff. So theoretically if you owed $1M to the IRS and you checked off “no” for delinquent taxes, there’s no way the state CPA societies would be able to prove the accuracy of your answer. Its silly of the state societies to even ask the question.

[Hustle Darling!]

A politician was asked about her tax debt recently (small business owner, single mom, taking care of chemo for dad, sick mom and a niece). Her response was that legally taxes can be deferred and that she's following the law. Good luck to you super mom!

Roger CPA Review
FAR - 5/31/16

[Recked]

It looks like VA's late payment penalty is 6%/month for a max of 30% plus interest of fed rate plus 2%.
I think the fed rate is now 5% plus VA's 2 would be 7%.
Depending on your assets and credit score, there is a chance you can get a personal loan with interest lower than the current 7% you are paying now.
It's doubtful, but even if you pay a little more in interest rate to ensure no issues, it might be worth it for the peace of mind.

I would tend to agree with all the above posters. If you are on a payment plan I do not think it will be an issue.

[Author]

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