|
What is
an Offer in Compromise?
An Offer
in Compromise (OIC) is a proposal to pay the
Board of Equalization (Board) an amount that
is less than the full tax or fee liability
due on a closed account.
Do you
qualify for the OIC program?
The Offer
in Compromise (OIC) program is for taxpayers
or feepayers that do not have, and will not
have in the foreseeable future, the income,
assets, or means to pay their tax liability
in full. You qualify for the program if you
meet all of the following criteria:
- Have a final tax or fee
liability on a closed account.
- Are no longer
associated with the business that
incurred the liability or a similar type
of business.
- Do not dispute the
amount of tax or fee you owe.
- Cannot pay the full
amount you owe in a reasonable amount of
time.
How do
you apply?
You must
complete an Offer in Compromise Application
(form
BOE-490 for individuals or form BOE-490-C
for all other entities) and submit it with
the supporting
documentation listed on the second page
of the application to the Board of
Equalization collector assigned to your
account. If your account is not assigned to
a collector, please contact your local
district office or division
that administers your account. For more
specific information on the OIC process, you
may contact the OIC Section at 916 322-7931.
How are
offers evaluated?
Although
each case is evaluated based on its own
unique set of facts and circumstances, we
give the following factors strong
consideration:
- The taxpayer's ability
to pay
- The amount of equity in
the taxpayer's assets
- The taxpayer's present
and future income
- The taxpayer's present
and future expenses
- The potential for
changed circumstances
Generally,
we approve an Offer in Compromise when the
amount offered represents the most we can
expect to collect within a reasonable period
of time. The offer must be in the state's
best interest.
Please
note: If you have been assessed a
fraud penalty, a minimum offer of the
outstanding tax and fraud penalty is
required for processing. However, if you
have been convicted of a felony tax evasion,
an offer will not be considered.
When do
you pay?
You should
not submit the offered funds until we
request them. Your funds will be held as a
deposit, and credit interest will not be
paid to you on the deposited amount if your
offer is denied and subsequently refunded.
In some cases, you may also be asked to pay
court fees for a Stipulation for Judgment.
Questions
and Answers
Publication
56 answers several of the most commonly
asked questions. Many practitioners use this
tri-fold as a helpful handout for their
clients.
Additional
questions and answers can be found on the OIC
Question and Answer Page.
If
you do not qualify for an offer, what
options do you have?
If you
dispute Board's staff's decision regarding
the amount of tax or fee you owe, you can
usually contest that decision by filing an
appeal (filing deadlines apply). Or you may
pay the liability and then file a Claim
for Refund, BOE-101 (filing deadlines
apply). If you have a petition for
redetermination, late protest, or claim for
refund pending, you may qualify for the Settlement
Program. You may want to refer to
Publication 17, Appeals
Procedures, for additional information
concerning the Board's appeal process. If
you want to make payments instead of paying
the liability in full, you should contact
the collector assigned to your case. You may
want to refer to Publication 54, Tax
Collection Procedures, for additional
information concerning the Board's
collection process.
|
