NY Tax Amnesty for Back Taxes [ 6 Must Know FAQs ]

NY tax amnesty and/or the IRS Fresh Start Program may be possible given the particulars of your situation.  

This article  will address how you can:

1.  settle your back taxes with New York State;
2. how the NY tax laws compare with the federal (IRS) tax laws; and
3.  how you may be able to get a fresh start  with both the IRS and the New York State Department of Taxation and Finance.

In order to be successful at obtaining tax amnesty, you need to know the tax laws and how to apply them.

Solving tax problems is what we do, day in and day out. Contact us for tax help after reading this article. We can assist you regardless of location. 

What is Tax Amnesty?

Tax amnesty programs are limited time, “act now,” opportunities for the forgiveness of a tax liability that may include interest and penalties for unfiled or unpaid taxes and without fear of criminal prosecution.

Tax amnesty will not apply if you are being pursued from either a civil or criminal standpoint from either the Internal Revenue Service or New York State Department of Taxation and Finance.

There is not a “ one-size fits all” tax amnesty program for either the IRS or NYS. 

In other words, you can’t call, email, or write the taxing authorities and ask them to reduce your tax liabilities or not criminally prosecute you.

If there was such a hotline, it would make our jobs as IRS and NY tax attorneys quite easy.

Rather, what is available to you as a federal and possibly NYS taxpayer are several programs to possibly reduce your tax liabilities and in certain cases, protect you from criminal prosecution.

Taxing Agencies ( IRS vs NYS)

You probably already know that the Internal Revenue Service administers the federal tax laws and the New York State Department of Taxation and Finance administers the New York State tax laws.

You will have to address your  tax issues with each government agency separately. 

If you live in New York, the tax laws that govern your New York taxes are different in many ways than the tax laws that govern the federal system.  

For example, if you are self employed or own a small business in New York, you may also have sales tax issues, which are only NYS related. 

From our experience in handling back tax matters on both the federal and NYS level,  the New York State Department of Taxation and Finance is a much more aggressive taxing authority than the IRS.

For example, if you pay $10,000 or more in back taxes to NYS, your NYS driver’s license will be suspended. 

The federal government will revoke your passport if you owe over $50,00o to the IRS.

A tax lien ( called a tax warrant in NY ) will be issued by New York State much more quickly than a federal tax lien and the New York Tax Department will be much more aggressive and quick in their collection efforts.

If you own a small business that has a sales tax problem, you can expect a knock on your door from a NY Tax Agent much more quickly than if you have a payroll tax issue with the Internal Revenue Service.

Tax Amnesty ( IRS and NY)

IRS

The Internal Revenue Service has a Voluntary Disclosure Program for individuals and businesses who have not filed their taxes.

There are voluntary disclosure procedures and processes for domestic and international tax issues.

If you qualify for said federal tax relief, you may be protected from criminal exposure and also have your potential penalties.

To determine the most appropriate legal strategy for your specific scenario, you should seek advice from our  qualified tax attorneys.

New York State

Through it’s Voluntary Disclosure Program for those of you with unfiled NY taxes or underreported income, you can possibly be protected from criminal exposure as well as have the associated penalties waived.

The NYS Voluntary Disclosure program applied to all forms of taxes ( including income, sales, and withholding).

A NYS Voluntary Disclosure Agreement is a legally binding agreement between you and the New York State Department of Taxation and Finance. 

The NYS Voluntary Disclosure process should be handled from beginning to end by an experienced NYS tax attorney well versed in tax controversy issues.

Fresh Start Program ( IRS vs NY) 

The IRS Fresh Start Program involved favorable changes to the federal offer in the compromise program; installment agreements; lien releases; and penalty abatements.

However, be that as it may, what you really want is: Does New York have a program called the “Fresh Start Program?”

Both the Internal Revenue Service and the New York State Department of Taxation and Finance have the Offer in Compromise.

The Offer in Compromise will possibly allow you to reduce your tax liabilities, including penalties and interest.

The IRS and New York State Offer in Compromise Programs are different since the federal and NY tax laws are different.

As such, before implementing any strategy regarding either your federal or New York State tax issues, you should contact us.

Help with Your Back Taxes ( IRS & NY)

If you have not filed your tax returns ;have underreported your income; or owe taxes, it is in your best interest to come forth voluntarily with the assistance of a tax attorney.

The difference between being pursued by a taxing authority and coming forth voluntarily can be the difference between a criminal or just a civil (monetary) issue,

Tax problems, unlike fine wine, do not get better with time.

Contact us today for tax help.