Low Income Taxpayer Clinic
Offers in Compromise
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be an option if you can’t pay your full tax liability, or doing so creates a financial hardship. You can review your eligibility for a Federal offer in compromise by using the IRS’ pre-qualifying tool.
To submit a Federal offer in compromise, you must review and complete the IRS’s Offer in Compromise booklet. In order to submit a NYS Offer in Compromise, you must review and complete the NYS offer forms that can be found on the Department of Taxation’s website.
Offers in compromise have many terms and conditions. Before submitting an offer in compromise, you may want to contact our Low Income Taxpayer Clinic to determine if an offer in compromise is your best option.
A payment plan is an agreement to pay the taxes you owe over a period of time. You should only request a payment plan if you believe you will be able to pay your taxes in full. If you qualify for a short-term payment plan you will not be liable for a user fee.
You may qualify for an installment agreement based on either:
- The amount of taxes you owe
- Your financial ability to make payments
Penalties and interest will continue to be added to your account until your balance is paid in full.
You may be eligible to enter into an installment agreement with the IRS using the IRS’ Online Payment Agreement tool. You may be eligible to enter into an installment agreement online with the NYS Department of Taxation and Finance (DTF) by creating an account with NYS’ Online Services site.
Before entering into an installment agreement, you may want to contact our Low Income Taxpayer Clinic to determine if an installment agreement is your best option.
Currently not Collectable Status
You can request Currently not Collectable (CNC) status from the IRS if you cannot afford to make any payments on your tax debts. You can learn more about this status by calling our Low Income Taxpayer Clinic (LITC) or by visiting the Taxpayer Advocate Service’s webpage.
Requesting a hearing
Notices from the Internal Revenue Service (IRS) and NYS Department of Taxation and Finance (DTF) often provide taxpayers with rights to a hearing. It is important to file a request for a hearing within the time allowed, otherwise you may lose your ability to effectively challenge the addition of tax, reduction of refund, or collection action. In order to maintain a right to a hearing, you must request one within the time allowed.
Common types of hearings requests include
You may have the right to request a trial in the U.S. Tax Court after receiving a:
- Notice of Deficiency from the Internal Revenue Service (IRS)
- Notice of Determination from the Internal Revenue Service (IRS)
- A Collection Due Process (CDP) hearing determination
- Passport suspension notice
You may have the right to request a Collection Due Process (CDP) hearing with the IRS after receiving a:
- Notice proposing a levy
- Notice of levy
- Notice of a Federal Tax Lien
You may have the right to a Collection Appeals Program (CAP) hearing after receiving a:
- Notice of Federal Tax Lien
- Notice of Levy
- Notice of Seizure
- Denial or Termination of Installment Agreement
- NYS Notice of Deficiency
- NYS Notice of Determination
- NYS Notice of Proposed Driver’s License Suspension Referral
You can file a request for NYS Conciliation Conference or file a petition for a tax appeals hearing online on the NYS Department of Taxation and Finance’s (DTF) website or by submitting a request or petition by mail.