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DTF-4.1 (7/23) Page 3 of 4
Instructions
Use the correct form If we accept your offer
Use Form DTF-4.1, Offer in Compromise, For Fixed and Final If the Tax Department accepts your offer, and you satisfy all
Liabilities, to submit your request to compromise liabilities, the terms of the offer (for example, you paid in full the offer and
where you do not have any protest or appeal rights. You do not complied with the terms of any collateral agreement), we will
have these rights if you owe tax, interest, or penalties due to eliminate the remaining balance of your liabilities included in this
a math or clerical error on a return, a change the IRS made to offer, satisfying any warrants.
your federal return, or your failure to pay on time the tax that you
reported due on your return. Taxpayer’s representative
Use Form DTF-4, Offer in Compromise, For Liabilities Not Fixed If you have a representative, you must include a completed
and Final, and Subject to Administrative Review, where you still power of attorney. We recommend Form POA-1, Power of
have protest or appeal rights. Attorney, available at www.tax.ny.gov. If you use another power
of attorney, it must include the same information as Form POA-1.
Considerations for using Form DTF-4.1
You must be in compliance with all paying and filing Estates
requirements for periods not included in your offer. This includes When Form DTF-4.1 is submitted by an estate fiduciary
estimated payments, tax deposits, and similar requirements. (executor or administrator), the fiduciary must submit a copy
of the appropriate court appointment (for example, letters
Generally, we may consider offers in compromise from the testamentary or letters of administration) or, if there is no court
following taxpayers: appointment, appropriate documents as requested by the Tax
• individuals and businesses discharged from bankruptcy Department. If the offer in compromise will be handled by the
• individuals and businesses that are insolvent (liabilities, fiduciary’s duly authorized representative, and the representative
including tax liabilities, exceed the fair market value of assets) will sign on page 2 on behalf of the fiduciary, the fiduciary
must also submit a completed power of attorney along with the
• individuals (not businesses) for whom paying the debt in full appropriate documents. We recommend Form ET-14, Estate Tax
would cause undue economic hardship Power of Attorney. If you use another power of attorney form, it
Submitting Form DTF-4.1 does not automatically suspend must include the same information as Form ET-14.
collection of a warrant, nor does it suspend the time for you to
take any action about an assessment. Specific instructions
Also, submitting Form DTF-4.1 does not affect the interest and Section 1. Taxpayer information
penalties that continue to accrue on your liabilities. Interest is Enter the full name and phone number of the taxpayer(s). If
due at the rate set by the Tax Law, from the date of the notice or the taxpayer is a business, enter the name of the business or
agreement until we receive full payment. its trade name (or both). If this is a joint income tax liability,
We may require a written collateral agreement or other security, both spouses may submit one application and enter both
to protect the Tax Department’s interest. names. However, for any other type of joint liability, such as a
partnership, each must submit separate Forms DTF-4.1. Enter
Generally, a taxpayer may make only one offer in compromise the taxpayer’s Social Security number, or, for a business, the
for a particular liability for a particular period. EIN.
Enter the taxpayer’s physical home address, mailing address if
Basis for compromise different or a PO Box, and business address (if applicable).
To be eligible, you must show that you have been discharged
in bankruptcy, you are insolvent, or (for individuals only) that Mark an X in a box to indicate entity type(s). If Other, fill in the
collection in full would cause you undue economic hardship. You blank.
are considered insolvent if all your liabilities (including your tax
debt) exceed the fair market value of your assets. If the taxpayer has a representative, enter the name, phone
number, and address of the representative, and attach a
Undue economic hardship generally means that you are unable completed power of attorney.
to pay reasonable basic living expenses, which are those
providing for the health, welfare, and production of income for Section 2. Amount offered
your family. We use IRS standards to help determine allowable Enter the total amount you intend to offer. You must offer more
living expenses. than $0, and you cannot include any amounts previously paid or
We also consider other factors, including the taxpayer’s age, collected against the liabilities.
employment status, and employment history; any inability to The amount must be a figure we realistically expect we could
earn income because of long-term illness, medical condition, or collect within a reasonable period of time. It is based on the total
disability; and any obligation to dependents. value of assets and the amount we could expect to collect from
All offers must include a completed Form DTF-5, Statement anticipated future income. Otherwise, the amount proposed must
of Financial Condition, available at www.tax.ny.gov, including be justified by information you submit.
copies of: Mark an Xin the Yes box if all or part of the money you are
• your last three federal income tax returns, offering for the compromise is borrowed. If Yes, enter the name
• a credit report less than 30 days old, and and address of the source of the borrowed money, and include a
list of any collateral you have pledged to secure the loan.
• your last 12 months of statements from your bank or financial
institution.
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