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Making tax repayment arrangements with the state

On Behalf of | Nov 6, 2019 | Federal And State Tax Collections |

Our law office has previously discussed how New Yorkers who wind up owing the IRS back tax payments can work with the IRS in order to repay those taxes without being reduced to poverty. t is important, however, that taxpayers in and around White Plains not lose sight of the fact that state and local authorities also impose taxes on citizens. As with the federal government, the State of New York has a Department dedicated to collecting tax revenue that goes unpaid for whatever reason.

Specifically, New York’s Department of Taxation and Finance enforces taxes imposed under state law. Like the IRS, this Department offers several options to people who have gotten behind on the taxes they owe to the state and who want to avoid the full force of the state’s collection efforts.

For instance, most people can qualify for an installment agreement with the Department. Like any other loan or payment arrangement, the agreement allows for a person to pay back taxes over time instead of in a lump sum. The important thing to remember, though, is that the entire debt has to be repaid.

Another option is what is called an Offer in Compromise, which actually allows a taxpayer to pay a percentage of what they owe with the Department agreeing to write off the rest of the balance. Getting approval for an offer in compromise is a bit more complicated, as the person applying for it has to demonstrate that having to pay back the full amount will cause an undue economic hardship. Those who have gone through bankruptcy or who are legally insolvent may also qualify, but all offers have to be in the best interests of the State of New York and its people, and not just those of the applicant.

Facing federal and state tax collections can be stressful. After all, it can have an impact on an individual’s financial stability. Therefore, whether an individual seeks to make an offer in compromise to stave off state collection efforts or pursue some other form of relief, he or she may require the assistance of an experienced attorney.