Revenue Ruling 99-08-3
All Nebraska Taxes

ABATEMENT OF INTEREST ASSESSED ON DELINQUENT TAXES

This guidance document is advisory in nature but is binding on the Nebraska Department of Revenue (Department) until amended. A guidance document does not include internal procedural documents that only affect the internal operations of the Department and does not impose additional requirements or penalties on regulated parties or include confidential information or rules and regulations made in accordance with the Administrative Procedure Act. If you believe that this guidance document imposes additional requirements or penalties on regulated parties, you may request a review of the document.

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Issue:

What guidelines will the Tax Commissioner use when considering whether to grant interest abatements?

Conclusion:

Interest on delinquent taxes will only be abated in very limited circumstances; generally when the interest is due to an error by the Department of Revenue, or in cases of extreme hardship.

Analysis:

Prior to 2008, abatement of interest on delinquent taxes was only authorized for the income tax or motor fuels tax programs. In 2008, LB 914 was enacted by the Legislature allowing for the abatement of interest on any tax programs administered under the Nebraska Revenue Act of 1967. These changes became effective on July 18, 2008.

Abatement of interest is at the Tax Commissioner’s discretion for interest assessed on delinquent sales and use taxes, and other taxes and fees administered in the same manner as the sales tax (e.g., local option sales and use tax, lodging tax, other tobacco products tax, litter fee, tire fee), as well as the income tax programs. Abatement of interest for motor fuels programs was not affected by LB 914.

A request for abatement of interest will not be considered until the tax has been paid.

The following list includes statutory criteria that previously granted the Tax Commissioner authority to abate interest for the income tax programs. These criteria will continue to be considered by the Tax Commissioner for purposes of granting abatement of interest. In each case, the amount of interest requested to be abated shall be documented with appropriate backup information. Interest abatement will be considered when:

In addition to the items listed above, the following criteria may also be considered by the Tax Commissioner when deciding whether to grant a request for an abatement of interest:

Neb. Rev. Stat. §§ 77-2711 and 77-2792 contain the provisions allowing for the abatement of interest by the Tax Commissioner for all tax programs other than motor fuels. Form 21A, Application for Abatement of Interest, will be modified to incorporate the above criteria. Meanwhile, taxpayers seeking to request an abatement of interest based on any of the above criteria should direct their request, in writing, to the Department.

APPROVED:
Douglas A. Ewald
Tax Commissioner

October 6, 2008