State Tax Negotiations: Different Than IRS Negotiations


Early on in our tax resolution law practice we learned that state tax negotiations were more difficult than working with the IRS. I recall our first foray with the  Georgia Department of Revenue. I submitted an offer in compromise that I know the IRS would have easily accepted. Georgia flat-out rejected it. Moreover, Georgia, instead of giving our elderly client a break, thought it better to levy his pension! 


Likewise, in our home state of Connecticut, the Connecticut Department of Revenue Services (DRS) has always been more aggressive in its tax collections, including criminal prosecutions for the failure to pay Sales & Use tax. We have been in court more than once in an effort (fortunately successful) to keep our clients out of jail.


There's also a difference in fees. US Tax court charges $60 to file suit. A state like Connecticut's tax court charges $350. So why is it so much more difficult to negotiate between the IRS and state revenue agencies? There are several potential theories.


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