New York State Offer in Compromise
I was recently researching a New York State Offer in Compromise (OIC) for a client and thought it might make an interesting topic for this blog.
New York Offer in Compromise (OIC)
Similar to the Internal Revenue Service’s Ofrfer in Compromise, a New York State Offer in Compromise (OIC) allows financially distressed taxpayers a way to leave tax liabilities behind by paying only a portion of their tax debt.
New York taxpayers that qualify for the relief are (a) individuals and businesses that are either insolvent, or discharged in bankruptcy; or (b) individuals (not businesses) who while not insolvent or bankrupt, would experience undue economic hardship by having to pay their outstanding tax liabilities in full.
How Taxpayers Can Apply for an OIC
Four primary documents are needed to make a New York State Offer. They are (i) the Form DTF-4, Offer in Compromise (Used for liabilities that are not fixed and final and subject to administrative review); (ii) the Form DRF-4.1, Offer in Compromise (for liabilities that are fixed and final); (iii) the Form DTF-5, Statement of Financial Condition and Other Information; and (iv) for those taxpayers seeking hardship relief, a statement describing the undue economic hardship they would experience were their NYS Offer in Compromise to be rejected.
Taxpayers and practitioners alike should recognize that the Department of Txation of Finance is currently updating both its publications and forms to include provisions for undue economic hardship. Until they’re properly updated, though, the Department advises all to use the existing applications for cases of hardship, as well as for the previously eligible bankruptcy and insolvency cases.
If you need either IRS or New York State tax help, contact the experienced New York tax attorneys at Mackay, Caswell & Callahan, P.C. today. With over 30 years’ of tax experience and offices throughout New York State, we can offer experienced tax help.