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:: Connecticut Offer In Compromise
IP 2004(31)
Procedures for Making Offers of Compromise
Purpose:
This Informational Publication explains the procedures for
making an offer of compromise to the Department of Revenue Services
(DRS) to resolve disputes from the application or enforcement of
Connecticut tax laws.
Effective Date: Upon issuance.
Statutory Authority: Conn. Gen. Stat. §12-2d.
Offers of Compromise: The Commissioner of
Revenue Services (Commissioner) or a designated agent of
the Commissioner is authorized to compromise any
controversy arising from the
application or enforcement of any Connecticut General
Statute over which the Commissioner has authority.
Grounds for
Compromise: The Commissioner or his designated agent may
compromise a liability for any of the following reasons:
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Doubt as to
liability;
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Doubt as to
collectibility; or
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Doubt
both as to liability and as to collectibility.
Doubt as to
Liability: Doubt as to liability exists where
there is a genuine dispute as to the existence or amount
of the correct tax liability under the law. Doubt
as to liability does not exist with respect to an audit
assessment:
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Where a notice
of assessment has been issued, but no timely protest
of the assessment has been filed; or
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Where a timely protest of the
assessment has been filed and a final determination
letter has been issued
upholding the assessment, but no timely appeal to
the Superior Court has been taken; or
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Where a timely
appeal to the Superior Court has been taken, but the
court of last resort upholds the final determination
letter.
Every
offer of compromise based on doubt as to liability must
involve a tax assessed by an audit assessment (and not a
self-assessed tax) and may only be made after the notice of
assessment has been issued.
The person to whom
an offer based on doubt as to liability should be submitted:
If an offer of compromise is initially made before a final
determination letter is issued by the Appellate Division,
the offer should be submitted to the Director of the
Appellate Division. If an offer of compromise is
initially made after a final determination letter is issued
by the Appellate Division, but before the final
determination is appealed to the Superior Court, the offer
should be submitted to the Director of the Legal Division.
If an offer of compromise is initially made after a final
determination has been appealed to the Superior Court, the
offer should be submitted to the General Counsel.
Not a protest or an
appeal: Making an offer of compromise does not in and of
itself:
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Constitute the
filing of a protest of an audit assessment, or extend
the time to protest an audit assessment; or
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Constitute the
taking of an appeal to the Superior Court, or extend the
time to take an appeal to the Superior Court.
Delegation order: The authority granted to
the Commissioner under Conn. Gen. Stat. §12-2d to compromise
any controversy between a taxpayer and DRS (excluding any
controversy arising from the application or enforcement of
the provisions of Chapter 216 of the Connecticut General
Statutes) based on doubt as to liability is delegated under
Delegation Order No. 5 (Rev. 1) to the
following officials:
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The Director of
the Appellate Division, if the difference between the
dollar amount (including interest, penalty, and addition
to tax) of the offer of compromise accepted by DRS and
the dollar amount (including interest, penalty, and
addition to tax) for which the taxpayer was assessed or
for which the taxpayer claimed a refund is less than
$25,000.The Director of the Legal Division or the
General Counsel, regardless of the dollar amount.
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The Director of
the Legal Division or the General Counsel, regardless of
the dollar amount.
Doubt as to
Collectibility: Doubt as to
collectibility exists in any
case where the taxpayer’s assets and income are less than
the full amount of the correct tax liability. An offer
of compromise based on doubt as to collectibility may
involve a tax assessed by an audit assessment, in which
event, the offer may only be made after the notice of
assessment has been issued, or a self-assessed tax.
The person to whom an
offer based on doubt as to collectibility should be
submitted: If an offer of compromise is based solely on
doubt as to collectibility (and is not based both on doubt
as to liability and as to collectibility), the offer should
be submitted to the Bureau Chief of the Compliance Process
Group. The taxpayer will be required to make a full
financial disclosure. An offer of compromise will
generally be accepted when it is unlikely that DRS would be
able to collect the full amount owed, and the amount offered
reasonably reflects collection potential.
Delegation order: The authority granted to
the Commissioner under Conn. Gen. Stat. §12-2d to compromise
any controversy between a taxpayer and DRS based on doubt as
to collectibility is delegated under Delegation Order No. 2
(Rev. 2) to the Director of the C&E Division, the Bureau
Chief of the Compliance Process Group, and the General
Counsel.
Doubt Both as to
Liability and as to Collectibility: Doubt both as to
liability and as to collectibility exists where there is a genuine
dispute as to the existence or amount of the correct tax liability under
the law, and where the taxpayer’s assets and income are less than the
full amount of the correct tax liability. Every offer of compromise
based on doubt both as to liability and as to collectibility must
involve a tax assessed by an audit assessment (and
not a self-assessed tax) and may only be made after the notice of
assessment has been issued.
The person to whom an offer based on doubt both as to
liability and as to collectibility should be submitted: If an offer of
compromise is initially made before a final determination letter is
issued by the Appellate Division, the offer should be submitted to the
Director of the Appellate Division. If an offer of compromise is
initially made after a final determination letter is issued by the
Appellate Division, but before the final determination is appealed to
the Superior Court, the offer should be submitted to the Director of the
Legal Division. If an offer of compromise is initially made after
a final determination has been appealed to the Superior Court, the offer
should be submitted to the General Counsel.
Circumstances Under Which DRS Will
Generally Not Accept an Offer of Compromise: DRS will generally not
accept an offer of compromise based on doubt as to liability for:
DRS will generally not accept an offer
of compromise based on doubt as to collectibility if:
Decision Not to Accept an Offer of Compromise Is Not
Subject to Review: A decision by the Commissioner or his designated agent
not to accept an offer of compromise is final and is not subject to review
by the Superior Court.
Effect on Other Documents: This Informational
Publication modifies and supersedes Informational Publication
2001(10),
Procedures for Making Offers of Compromise.
Effect of This Document: An
Informational Publication addresses frequently asked questions about a
current position, policy, or practice, usually in a less technical
question and answer format.
For Further Information: Call DRS during business
hours, Monday through Friday:
TTY, TDD, and Text Telephone users only may transmit
anytime by calling 860-297-4911.
Forms and Publications: Forms and publications are available anytime by:
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Internet: Preview and download forms and
publications from the DRS Web site at www.ct.gov/DRS
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DRS TAX-FAX: Call
860-297-5698 from the handset attached to your fax machine and
select from the menu. Only forms (not publications) are
available through TAX-FAX.
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Telephone:
Call 860-297-4753 (from anywhere), or 1-800-382-9463 (in-state) and
select Option 2 from a touch-tone phone.
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For business returns: Use Fast-File to file
sales and use taxes, business use tax, room occupancy tax, estimated
corporation business tax, business entity tax, or withholding tax
returns over the Internet. Visit the
DRS Web site at
www.ct.gov/DRS and click on File/Register OnLine.
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For resident income tax returns: Use
WebFile to file personal income tax returns over the
Internet. Visit the DRS Web site at www.ct.gov/DRS and click on
File/Register OnLine.
DRS E-News Service
:
Get connected to the latest news from DRS.
Receive notification by e-mail of changes to legislation, policies, and
procedures. DRS E-News is easy to sign up for – visit
www.ct.gov/DRS and follow the
directions. Subscription services are available for
employer’s withholding tax, Fast-File information, Alerts, News –
Press Releases, and Top 100 Delinquency List.
IP 2004(31)
Miscellaneous taxes
Offers of Compromise
Issued: 10/20/2004
Connecticut - Offer
in Compromise Forms
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