You are at the right place if you have questions about settling your tax liability with the New York State Department of Taxation and Finance with a NYS Offer in Compromise.
The good news is that an NYS Offer an Compromise may help settle your NYS the underlying tax liability, the penalties, and interest [ which is compounding daily. ]
The bad news is that most offers fail because submitting an offer and negotiating with the NYS Tax Department is based knowledge of the New York tax laws and advocacy.
If after reading this article, you have questions about settling your New York State tax liability, feel free to contact us. It's what we do day in and day out. We can assist you regardless of location.
What is an NYS Offer in Compromise?
Under the NY Tax Law, a NYS offer in compromise is a program that allows a taxpayer to reduce the overall tax liability that is owed to New York State by offering a "reasonable amount."
A reasonable offer in the eyes of New York State is based upon a two part test.
In particular, New York State will look at it’s ability to collect the tax liability (collectability) and your financial circumstances.
With regard to collectability, New York State will look at it’s ability to collect the tax liability within a reasonable period of time under the tax laws.
The amount that is offered to New York State cannot be a lesser amount that NYS can expect to collect from you through asset seizures, income executions, and bank levies.
In other words, If New York State determines that it can collect a greater amount from you through the above legal channels as opposed to the offer that you propose, then your offer will be rejected.
Based upon our experience and knowledge of the NY tax laws , we can help determine what a reasonable offer should be and increase the likelihood of success. We will handle the entire offer process from submission to negotiations.
Settling NYS Sales Tax
If you or your business has a NYS sales tax liability, there are number of additional issues that you should know before moving forward with an NYS offer in compromise.
Take a few minutes; click on the link right below: and read our detailed article on:
New York Sales Tax Defense FAQ(s)
What You Must Submit with an Offer
Negotiating with the New York State Department of Taxation and Finance is based upon detailed review of your financial circumstances as it applies to the relevant NY tax laws.
Under the penalties of perjury, you will have to provide detailed information and attest to your income, expenses, assets, etc. and provide documentation regarding same.
Prior to submitting an documentation to the NY Tax Department, we do a detailed review of all documentation to determine whether there will be any issues we will need to address to increase the likelihood of acceptance.
Negotiating with the taxing authorities is based upon thorough preparation; strategy and the NYS tax laws.
NOT a "Do it Yourself" Project
Submitting and negotiating an NYS Offer in Compromise should be based upon a thorough knowledge of the NY tax laws.
Submitting and negotiating a NYS Offer in Compromise is not like negotiating a car purchase, where the car dealer is looking to “ move some cars off the lot. ” Submitting paperwork with a "number" that you deem reasonable is going to be a recipe for failure.
As such, many offers can be rejected for the following reasons:
- You do not meet the statutory requirements as set forth in the NYS tax law.
- You submitted false information to the taxing authority.
- You submitted a frivolous offer in compromise.
- You did not disclose all of your financial information.
- You offered the wrong amount.
NYS vs. IRS Offer in Compromise
An IRS Offer in Compromise is based upon the federal tax laws. It would be used for the purposes of attempting to lower a liability with the Internal Revenue Service.
The federal tax laws are different than the NYS tax laws.
A separate offer will have to submitted to the Internal Revenue Service and to New York State.
We know both the federal and NYS tax laws.
Since we are New York tax attorneys that handles both federal and NYS tax matters, we routinely assist clients nationwide with NY tax matters as well as federal tax issues.
How Long Does It Take To Get a Decision
It can take anywhere from six to twelve months before a decision is received from the New York State Department of Taxation and Finance pertaining to an NYS Offer in Compromise
Will an Offer Reduce the Trust Fund Taxes of My Business?
It may based upon the circumstances of your particular tax issue.
There are also instances where the New York State Department of Taxation and Finance will accept a lesser amount if it is in the best interests of all the parities.
If the offer is accepted, it will lower the overall liability of the business by the amount of your accepted offer. The remaining business owners, if any, will still be responsible for their portion of the tax liability.
Should I file a Joint OIC with my Spouse?
If you filed a joint tax return, you are likely jointly and severally liable for the tax liability.
If you are jointly liable, you can file a joint offer with your spouse.
If you are not been held liable for the spouse, then there is no reason for you to file with your spouse.
If you only an offer for yourself and not your spouse and your offer is accepted, then your spouse will be still be responsible for the tax liability.
What You Must Do If Your Offer is Accepted
If you offer is accepted, you are not of the woods yet. First, you must remain in compliance with the tax laws for the next 5 years-- think of as “tax probation.”
Remaining in compliance with the tax law means filing all your tax returns on time and not incurring any unpaid tax liabilities.
There are some other restrictions that you should discuss with your tax attorney to determine the best route to settling your tax liability.
Solving Your NY Tax Liability [the first step]
If you need assistance with solving your New York tax problem, take the first step and contact our office. The New York Tax Department will get more aggressive over time.