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An offer in compromise is a binding agreement where New York state agrees to accept less than the full amount of tax, interest, and penalties due. This is something our NYS Offers in Compromise Tax Lawyers can help with.
If you owe tax debt in NY, you could qualify for the NYS OIC – offer in compromise. In this situation, New York state lets you clear your tax debt for less than what you owe. Both businesses and individuals can apply. It’s great if you can’t afford monthly payments on an installment payment agreement. The Department of Tax and Finance provides this option to taxpayers struggling financially.
If you believe your tax liability is incorrect, that’s another situation where this can also apply.
NYS accepts offer in compromise for one, or both, of the following reasons
Doubt as to liability
This is a situation where the state is not sure if you owe the funds or not. This can happen in a number of situations. It can include situations where the state refused to proceed the amended tax return. It can also be for situations where the state made incorrect changes to your tax return.
Doubt as to collectibility
This is where the state believes it simply will not be able to get the funds from you. It’s where the collection in full would cause economic hardship. This only applies to individuals, not businesses.
Undue economic hardship is where you cannot afford basic expenses. Reasonable expenses mean things like food, clothing, housing. It can also include things like utilities, transportation, so forth – basic necessities. In other words, expenses which support your health, welfare, and your family.
NY state uses the IRS’s financial standards as a reference for determining allowable living expenses. The state of NY accepts most reasonable expenses
When determining doubt as to collect, DTF considers the following items
NY State also looks at the following factors
Individuals, and businesses, have to meet certain criteria in order to be eligible for an NYS offer in compromise. You be insolvent, or bankrupt, or paying in full must create undue economic hardship. If NY state believes that the offer undermines tax compliance, then it won’t work with you. In other words, the state will only approve offers that don’t undermine its authority. If you have a history of noncompliance, it won’t approve it.
The state only allows one proposal for a tax debt from a particular period.
What You Need to Understand
Here are some points you should understand before submitting your offer in compromise in New York
Common reasons for an NY offer in compromise to be rejected
Here are some common reasons for rejections
Consider speaking to our NY offer in compromise lawyer today.