Tax Debt Negotiations and Settlements – Nassau & Suffolk Counties, Long Island
Many people fall behind in paying taxes to both New York State Department Taxation and Finance and the Internal Revenue Service. This is a huge problem for both the federal and state governments, as such, there are programs in place to negotiate the debt owed to both respective governmental agencies. Our office can negotiate your tax debt and come to a resolution that suits you moving forward.
The following statistics are provided by the IRS; the Internal Revenue Service had approximately 76,000 employees who processed roughly 133,949,000 tax returns in 2019. This statistic has not changed much since last year and highlights the fact that the IRS is inundated with work. Understanding these statistics, it is quite clear why it is so very hard to deal and negotiate with the IRS.
Currently, the IRS are now even more backed up then they were prior to COVID-19. The IRS extended the tax deadline from April 15, 2020 to July 15, 2020. Despite the tax deadline extension, the IRS is firmly behind where they would have been this year because of Coronavirus. Thus, negotiating can be very difficult but our office has the necessary systems in place to negotiate on your behalf with ease and confidence.
Please see the following IRS programs that our office will use to negotiate your tax liability:
Extension to Pay: Are agreement plans that provide taxpayers an additional 120 days to pay the IRS debt owed in full. This allows the taxpayer to avoid any late payment penalty.
74 Month Installment Agreements: Are payment plans that provides the taxpayer 74 months or 6 years to payback the IRS.These plans are available to taxpayers with up to $50,000 in tax debt owed. The IRS may require financial documents but typically do not require a complete financial statement.
84 Month Installment Agreements: Are payment plans that provide taxpayers 84 months or 7 years to repay their IRS debt. These plans are available to taxpayers with over $50,000 but under $100,000 owed to the IRS. The IRS may require financial documents but typically do not require a complete financial statement. Finally, the IRS will likely also require this payment plan have automatic payments set up prior to finalizing this plan.
Partial Pay Installment Agreements: Are payment plans that provides taxpayers who cannot afford either 74- or 84-Month Installment Agreements. The Partial Payment Installment Agreement is a plan which is based on your financial statement, which considers your income and expenses. Despite all penalties and interest accrued being applied to these plans, the taxpayer will likely pay significantly less after making payments for 10 years. A reduction to the total balance owed is possible because the taxes owed will be eventually be classified as non-collectable due to the statute of limitations. Moreover, tax liens will be filled, and the IRS may ask for updated financial statements every 24 months, which may lead to increased or payments if the taxpayer has an increased income. Overall, this is an affordable option for those taxpayers who qualify.
Currently Non-Collectible (CNC): Are an option that requires financial statements to be provided. This option allows for eligible taxpayers to avoid a monthly repayment plan while allowing the taxpayer to be in good standing with the IRS. The IRS will likely require financial statements every year to continue to have the taxpayer’s debt in a Current Non-Collectible status.
Offers in Compromise (OIC): Are payment plans that allow taxpayers to settle their entire IRS debt for less than the total owed. The IRS will not accept an Offer in Compromise if the taxpayer is believed to have an ability to pay the debt either as a lump sum or in a repayment plan offered.
Discharging IRS Debt through Bankruptcy: The only IRS debt that is dischargeable through a Chapter 7 Bankruptcy is income taxes. Taxes other than income taxes can never be eliminated through Bankruptcy, payroll taxes and property taxes just to name a few. The income tax debt attempting to be discharged must be at least three years, the tax return showing the debt must have been filed and the debt must have been accessed IRS over 240 days prior to filing for Bankruptcy.
Installment Payment Agreement (IPA):
Offer in Compromise Program:
Voluntary Disclosure and Compliance Program:
Challenge Tax Department Actions:
Discharging NYS Debt through Bankrupcty: