Offer in Compromise - FAQ's

1. What does the Board of Equalization consider a fair Offer in Compromise in relation to the amount due?
2. Can I be involved as an owner in the same or a similar type of business?
3. My IRS/FTB OIC has been accepted. Will the Board automatically approve my Offer in Compromise?
4. Can I make payments on the offered amount?
5. Do I need to have someone represent me?
6. Can prior payments be credited to the offered amount?
7. Does interest stop accruing on my liability while my OIC is being evaluated?
8. Will collection action be suspended while my offer is being evaluated?
9. Will state tax liens be released if my Offer in Compromise is accepted?
10. What is the current Offer in Compromise acceptance process?
11. How does a judgment affect me?
12. What does a public record statement include?
13. How long will it take to get a decision on my OIC?
14. If the Board determines that my Offer in Compromise is not acceptable, will I be contacted?
15. If my Offer in Compromise is rejected, can I choose to apply the deposit to my liability?
16. When does a tax or fee liability become final?
17. I don't qualify for the OIC program. Are there other options that I can pursue to resolve my liability?
18. Can I get relief from the tax liability by filing bankruptcy?

1. What does the Board of Equalization consider a fair Offer in Compromise in relation to the amount due?

Generally, an Offer in Compromise will be accepted when the amount offered is more than the Board can expect to collect within a reasonable period of time, typically from five to seven years.

Back to Top of Page

2. Can I be involved as an owner in the same or a similar type of business?

No, in order to qualify for an offer in compromise, you cannot have an interest or association with the same business or a similar type of business as the transferred or discontinued business for which you seek a compromise.

Back to Top of Page

3. My IRS/FTB OIC has been accepted. Will the Board automatically approve my Offer in Compromise?

No. Your Board offer will be evaluated separately from your IRS or FTB offer.

Back to Top of Page

4. Can I make payments on the offered amount?

No, we require full payment of the offered amount before we will forward the Offer in Compromise for final consideration.

Back to Top of Page

5. Do I need to have someone represent me?

Representation is not required. Offer in Compromise is available to all taxpayers, whether or not they are represented. If you think you need representation, there are many tax professionals who have experience with the OIC process.

Back to Top of Page

6. Can prior payments be credited to the offered amount?

No, prior payments are not credited towards the offered amount. However, prior payments and the offered amount compared to the total liability are taken into consideration when evaluating your Offer in Compromise.

Back to Top of Page

7. Does interest stop accruing on my liability while my OIC is being evaluated?

No, interest continues to accrue on your liability while your OIC is being evaluated.

Back to Top of Page

8. Will collection action be suspended while my offer is being evaluated?

Yes, if we are in receipt of a relatively complete application and a deposit of the offered amount. You may also be required to continue payments if you are currently in an Installment Payment Agreement. However, if delaying collection activity jeopardizes our ability to collect the tax, we may continue with collection efforts. You may want to refer to Publication 54, Tax Collection Procedures, for additional information concerning the Board's collection process.

Back to Top of Page

9. Will state tax liens be released if my Offer in Compromise is accepted?

We release state tax liens upon final approval of your Offer in Compromise. If another partner existed on the permit, that person’s liability will not be canceled nor will the lien be released. A partial release will be issued to release you from the effects of the lien.</p>

Back to Top of Page

10. What is the current Offer in Compromise acceptance process?

Recommendations to accept offers for Sales & Use Taxes, Underground Storage Fuel Tax, and Use Fuel Tax where the compromise is less than $7,500.00 in tax will be forwarded to the Board's Chief Counsel and Executive Director. Recommendations to accept offers where the compromise is more than $7,500.00 in tax will be forwarded to the Executive Director, and to the Board Members for a decision to be determined at a Hearing. Recommendations to accept offers for all other tax and fee programs are handled by the Attorney General's Office (there are fees associated with the court filing of the offer and you may be contacted for these fees).

Back to Top of Page

11. What is the process after my Offer is approved?

The Board will apply the offered funds to the total amount owed and release any tax liens associated with the taxpayer involved in the compromise. The Board is required by law to post a public record statement when a compromise of tax and/or penalties in excess of $500 is approved.

Back to Top of Page

12. What does a public record statement include?

A public record statement includes the name of the taxpayer involved in the compromise, the amount of unpaid tax and related penalties, interest, or other amounts involved, the amount offered, and a summary of the reasons why the compromise is in the best interest of the state. A public record statement is placed in the office of the Board's Executive Director for at least one year.

Back to Top of Page

13. How long will it take to get a decision on my OIC?

Generally, if we accept your offer for processing, we will have a decision to you within 180 days after receiving your Offer in Compromise. If your account is more complex, it may take longer than 180 days.

Back to Top of Page

14. If the Board determines that my Offer in Compromise is not acceptable, will I be contacted?

We may contact you to discuss your account and to determine the most appropriate resolution. For example, if we determine that you have the ability to make monthly payments that will exceed the amount offered, we will work with you to establish an installment payment agreement.

Back to Top of Page

15. If my Offer in Compromise is rejected, can I choose to apply the deposit to my liability?

Yes. If you choose to do so, the effective date of the payment is the date the deposit was made. If the deposit was posted by a third party, we must obtain their approval before applying the payment.

Back to Top of Page

16. When does a tax or fee liability become final?

Generally, a tax or fee liability becomes final after you have exhausted all your appeal rights. The tax or fee liability is not final if you have a petition for redetermination, late protest, claim for refund, or settlement pending.

Back to Top of Page

17. I don't qualify for the OIC program. Are there other options that I can pursue to resolve my liability?

Yes. If you dispute the amount of tax or fee you owe, you can usually contest that decision by filing an appeal (filing deadlines apply). You may want to refer to Publication 17, Appeals Procedures, for additional information concerning our appeal process. If you have a petition for redetermination, late protest, or claim for refund pending, you may qualify for the Settlement Program. 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 our collection process. In addition, you may pay the liability and then file a Claim for Refund, BOE-101 (filing deadlines apply).

Back to Top of Page

18. Can I get relief from the tax liability by filing bankruptcy?

Part or all of your taxes may be dischargeable under the bankruptcy code. If this is a consideration, you may want to seek legal advice.

Back to Top of Page