New York State Tax Debts, the Grateful Dead and not a word about Marijuana

Tax Debts the Grateful Dead and the IRS

The New York State Offer in Compromise Program is designed to help financially distressed taxpayers who face overwhelming tax liabilities. This includes any liability administered by the Tax Department. Taxpayers accepted into the program may pay a reasonable amount as a compromise, satisfying the debt in full. While we carefully review and consider every offer in compromise, we do not accept all offers. While reviewing an offer, we may continue efforts to collect the debt.

If the amount owed is more than $100,000 (not including interest and penalties), a New York State Supreme Court justice must approve the offer in compromise.

Who is eligible?

·       Individuals and businesses discharged from bankruptcy

·       Individuals and businesses that are insolvent (liabilities, including tax liabilities, exceed the fair market value of assets)

·       Individuals (not businesses) for whom paying the debt in full would cause undue economic hardship

To participate, taxpayers must have filed all required New York State tax returns.  The amount taxpayers propose as a compromise must be an amount the State realistically expects it could collect within a reasonable period of time. It is based on the total value of assets and the amount they could expect to collect from anticipated future income. Otherwise, the amount proposed must be justified by information the taxpayer submits.

What is undue economic hardship?

Generally, undue economic hardship means that an individual taxpayer is unable to pay reasonable basic living expenses, which are those providing for the health, welfare, and production of income for their family. We use Internal Revenue Service (IRS) standards to help determine your allowable basic living expenses.

The State considers other factors, including:

·       Age, employment status, and employment history

·       Inability to earn income because of long-term illness, medical condition, or disability

·       Obligations to dependents

·       Extraordinary circumstances, such as special educational expenses, medical catastrophe, or natural disaster

·       Inability to borrow against or liquidate assets due to hardship

Undue economic hardship does not include an inability to maintain an affluent or luxurious lifestyle.

What forms do taxpayers need?

Form DTF-4.1, Offer in Compromise (For Fixed and Final Liability), or Form DTF-4, Offer in Compromise (For Liabilities Not Fixed and Final and Subject to Administrative Review)

Form DTF-5, Statement of Financial Condition and Other Information, including copies of:

• The last three federal income tax returns

• A credit report less than 30 days old

• The last 12 months of statements from a bank or financial institution

Successful Civil and Criminal Tax Representation We practice before the Internal Revenue Service (“IRS”) the New York State Department of Taxation and Finance (“NYSDTF”) the Department of Justice Tax Division (“DOJ”) and the Defense Office of Hearings and Appeals (“DOHA”). *To schedule a FREE legally privileged consultation with a licensed Federal Tax Practitioner and Attorney call Selig & Associates directly (212) 974-3435 #New York City's Most Trusted Tax Advisors, #Successful Tax Attorney, #Honest Tax Accountant, #Tax Problems Solved,  #New York City's Most Trusted Tax Advisors, #Successful Tax Attorney, #Honest Tax Accountant, #Tax Problems Solved 

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