Form Boe-490 - Offer In Compromise Application Page 2
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11What you should know before preparing an Offer in Compromise Application
Are you an OIC
The Offer in Compromise (OIC) program is for taxpayers/feepayers (hereinafter called
candidate?
“taxpayers”) that do not have, and will not have in the foreseeable future, the income,
assets or means to pay their tax liabilities. This program allows a taxpayer to offer a
lesser amount for payment of a non-disputed final tax liability on a closed-out
permit. The Board of Equalization (Board) will not entertain an Offer in
Compromise on an active permit or for a taxpayer who is involved in the same
business or a similar business. A taxpayer wishing to compromise a liability
through the OIC process must no longer own the personal property that incurred
the tax that could result in an additional tax or fee assessment.
Generally, we approve an Offer in Compromise when the amount offered represents
the most we can expect to receive from the taxpayer’s current income or assets.
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
Can we process
We will only process your Offer in Compromise Application if you meet the following
your application?
criteria:
• You are no longer associated with the business that incurred the liability to which
the offer applies. This includes operating the same type or similar business.
• You have fully completed the Offer in Compromise Application and provided all
supporting documentation.
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
felony tax evasion, an offer will not be considered.
Will we require
Yes, we will require you to continue making periodic payments as called for in any
you to continue
existing installment payment agreement while your offer is being considered. The Board
payments on an
will strive to process your offer and provide a decision within 180 days of receiving a
installment
completed application along with the required documentation.
payment
agreement?
Are collections
Collection action will usually be suspended until the Offer in Compromise evaluation is
completed. However, if delaying collection activity jeopardizes our ability to collect the
suspended?
tax, we may continue with collection efforts.
When should
The OIC Section will request that the offered funds be submitted at the time your offer is
offered funds be
formally considered. The funds will be held in the form of a deposit, and will be refunded
submitted?
to you if your offer is denied. Credit interest will not be paid to you on the deposited
amount if your offer is denied.
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