Think the Interest on Unpaid Wisconsin Tax Liabilities is too High?

Many clients with outstanding Wisconsin tax liabilities understand that they owe the tax but ask “is there anything that we can do about the interest?” The reason for this question is that Wisconsin is permitted to charge interest of 18% on delinquent tax liabilities.

The statutory language in Wisconsin Statutes Section 77.60(2) provides the relevant language for sales taxes -- “delinquent sales and use taxes shall bear interest at the rate of 1.5% per month until paid.” Unfortunately, no statute provides for the waiver or abatement of the applicable interest charges, and the courts do not have jurisdiction to review the interest charged on delinquent taxes. Thus, the interest charges included in an assessment are required by statute and there is nothing that can directly be done about the interest on a Wisconsin tax liability.

The way to attack an interest charge is to contest the underlying tax liability. If the tax liability can be reduced, the related statutory interest goes down. But trying to argue for a reduction in interest because there was a reasonable cause for the tax liability having gone unpaid will not be successful. Rather, any argument that there was reasonable cause for the unpaid tax liability is best reserved in an argument for the abatement of penalties or collection fees (which can be done).