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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10143
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I just received a tax warrant notification fairly large sum

Customer Question

Hi, i just received a tax warrant notification for a fairly large sum of money, to me. I have not paid this in the past because i couldnt, as i live paycheck to paycheck. my ? is, is there a hisptory of people settling with the state for much lower payments and satisfying the warrant? thanks
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi,

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Yes, this IS possible ...

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NY Dept. of Tax and Finance does have an Offer In Compromise program

Expert:  Lane replied 1 year ago.

The Offer in Compromise program allows qualifying, financially distressed, taxpayers the opportunity to put overwhelming tax liabilities behind them by paying a reasonable portion of their tax debt.

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NY says they'll consider offers in compromise from:

  • individuals and businesses that are insolvent or discharged in bankruptcy
  • individuals who are not insolvent or bankrupt when payment in full would create what they call an undue economic hardship (Only individuals may apply for relief based on undue economic hardship. This may include relief from business debts for which an individual is personally responsible.)
Expert:  Lane replied 1 year ago.

Here's how they define "undue economic hardship"

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"Generally, undue economic hardship occurs when a taxpayer is unable to pay reasonable basic living expenses. Basic living expenses are those that provide for the health, welfare, and production of income for the taxpayer or the taxpayer's family. We will look to the Internal Revenue Service Collection Financial Standards to help determine a taxpayer's allowable basic living expenses."

Expert:  Lane replied 1 year ago.

They will not publish the rates at which they grant, but say that each case is different. In my experience the program works a lit like the Federal OIC .... they take your assets (and income minus allowable living expenses) to determine what you CAN pay

Expert:  Lane replied 1 year ago.

NY has a specific office for this:(###) ###-####/p>

Expert:  Lane replied 1 year ago.

You might want to ask about the updating of Undue Economic Hardship form that is going on right now

Expert:  Lane replied 1 year ago.

You can get a feel for what they consider, by going here: http://www.tax.ny.gov/enforcement/collections/oichrdshp.htm

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From there:

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In addition to basic living expenses, we will consider other factors that can impact an individual's financial condition, including:

  • taxpayer's age, employment status, and employment history
  • inability to earn an income because of a long-term illness, medical condition or disability
  • obligations to dependents
  • extraordinary circumstances such as special educational expenses, medical catastrophe or a natural disaster
  • inability to borrow against or liquidate assets due to hardship

Undue economic hardship does not include the inability to maintain an affluent or luxurious lifestyle. Other expenses that we generally won't allow as necessary living expenses in determining the existence of an undue economic hardship include:

Expert:  Lane replied 1 year ago.

I hope this helped

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Please let me know if you have questions

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Lane

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