Multi-Agency Form for Offer in Compromise
What you should know before preparing an Offer in Compromise
The Offer in Compromise (OIC) program is for taxpayers that do not have, and will not have in the
Are you an OIC
foreseeable future, the income, assets, or means to pay the tax liability. It allows the taxpayer to
candidate?
offer a lesser amount for payment of a nondisputed final tax liability.
Although each case is evaluated based on its own unique set of facts and circumstances, we give
the following factors strong consideration in the evaluation:
• 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.
• The offer is in the best interest of the State.
We will not recommend approval of offers if there are assets or income available to pay more than
the amount offered.
Can we process
Your offers will be evaluated independently by each agency. The BOE, FTB, and EDD have
different criteria for participation in their OIC programs.
your application?
•
For all agencies, you must agree that you owe the amount of the liability. If you dispute the
liability, you should appeal through the appropriate agency’s appeal process.
•
For FTB, your application will be processed if all of the required FTB income tax returns have
been filed. If you have no filing requirement, note it on your application.
•
For both BOE and EDD, you must be out of business and must not have a controlling interest
or an association with the business or a successor to the business that incurred the liability.
This includes operating a business of the same nature.
•
For EDD, you cannot have access to income to pay more than the accumulating interest and
6.7 percent of the outstanding liability on an annual basis.
•
For EDD, an offer will not be considered for liabilities assessed for fraud or where the
employer has been convicted of a violation under the California Unemployment Insurance
Code.
•
For BOE, an offer for a liability with a fraud assessment will not be considered if there is a
criminal conviction of fraud. For other fraud assessments, an offer will be considered if a
minimum of the tax plus the fraud penalty is offered.
All the agencies require that you continue making periodic payments as called for in any existing
Will we require
installment agreement while your offer is being considered.
you to continue
payments on an
Installment
Agreement?
Are collections
Submitting an offer does not automatically suspend collection activity. Wage garnishments already
in place at the time of the offer will continue and will not be considered as partial payment of the
suspended?
offered amount. However, in many cases, collection action will be suspended until the OIC
evaluation is completed. If delaying collection activity jeopardizes the State’s ability to collect,
collection efforts may continue. Interest will continue to accrue as prescribed by law.
When should the
Do not send any offered funds now. The agencies you have applied to will contact you once they
offered funds be
have evaluated your offer.
submitted?
DE 999CA (6-06) (INTERNET)
Page 2 of 12
CU