Offer in Compromise

Tax debts are always an unwanted headache for taxpayers. They are a specific amount of tax that is payable to the Internal Revenue Service. They increase over time with the addition of interest and penalties. If they are not paid as soon as possible, they get double and that hurts more.

The New York State offer in compromise program allows taxpayers to reduce tax debt they cannot fully pay when it is due. It is for those who need long-term relief and would face undue economic hardship if they paid the full amount. Undue economic hardship means being unable to pay the tax debt and meet reasonable financial obligations.

New York State taxpayers who are unable to satisfy their tax payment or filing obligations may face consequences such as tax warrants, wage garnishment, asset seizure, and penalties. Relief options include requesting penalty abatement, setting up monthly payment plans, exploring the Offer-in-Compromise program, filing for Innocent Spouse Relief, and utilizing the Voluntary Disclosure Program.

An Offer in Compromise is a tax resolution option that allows individuals to pay off their tax debt for less than they owe. While it offers benefits, there are also downsides to consider. Filing an Offer in Compromise requires a $205 application fee and an initial payment of 20% of the proposed lump sum amount or the first month's payment for periodic payments.