Your state payments are allowed when calculating an IRS - Offer in Compromise!
For example: if you set up a $300 payment plan with the State - for the most part and with few exceptions -- the IRS will allow that in your calculation of your Offer in Compromise settlement.
How much money is it worth to your IRS Offer? Well every $100 of disposable income reduced translates into $1200 in reduction of your Offer. So a $300 payment plan should reduce your Offer by $3600.00. Now all of this is assuming that you do have some disposable income left over to pay the State. If you don't have any disposable income - you might need to make a settlement with the State as well.
We have blogged heavily about the Offer in Compromise program and the 2012 rule changes in our 6 part series which starts here:
Offer in Compromise Rule Changes for 2012: Biggest Ever - Part I of a 6 Part Series
Owe the IRS? For 30 years, WATAX has been solving every kind of tax problem. Call us at 1-888-282-4697 or email a description of your tax issue and we’ll contact you.