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OFFER IN COMPROMISE For individuals and businesses who cannot pay the full tax or fee balance they owe
Enlarge image | OFFER IN COMPROMISE For individuals and businesses who cannot pay the full tax or fee balance they owe |
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WHICH OFFERS ARE ACCEPTED? • Your ability to pay
Generally, we will accept your offer if we agree that the amount • The amount of equity in your assets
you propose to pay represents the maximum amount we can • Your present and future income and expenses
expect to collect from you in a reasonable period of time,
• Whether your circumstances are likely to change
typically four years. We will not accept your offer if you have
assets or income available to pay your liability in full. • Whether your liability was due to tax evasion or fraud
We may use both public and private sources of information to
OIC PRE-QUALIFIER TOOL verify your financial condition.
If your business is closed, you may use our online
OIC Pre-qualifier Tool to assist you in determining whether an WHEN DO I PAY?
OIC is right for you. If our OIC Section recommends acceptance of your offer,
If you are interested in an OIC and your business is still active, we will write to you and ask you to pay the full amount you
The California Department of Tax and Fee Administration’s proposed. If you are not able to pay the full amount at one
please contact the OIC Section at 1-916-322-7931 to find out if
(CDTFA) Offer in Compromise Program provides a payment time, the OIC Section may (at their discretion) work with you to
you are eligible.
alternative for individuals and businesses who cannot pay their set up payments.
tax or fee liability in full. HOW DO I APPLY? If you choose to pay the full amount of your offer at once, we
WHAT IS AN OFFER IN COMPROMISE? Complete an Offer in Compromise Application (CDTFA-490 will hold your payment as a deposit while CDTFA management
for individuals and CDTFA-490-C for all others) and submit completes your final review.
An offer in compromise (OIC) is a proposal to pay us an
it, along with supporting documentation (described in the
amount that is less than the full tax or fee liability due. If you WHAT ARE THE FINAL STEPS?
application), to your local CDTFA office or to the division that
make an offer and we accept it, you will no longer be liable for
handled your account. They will forward your request to the After the OIC Section recommends acceptance of your offer
the full amount due, and we will release any related tax liens as
Offer in Compromise Section for evaluation. Do not submit any and you have paid the offer amount, CDTFA management
provided by the terms and conditions relative to your offer.
payment with your offer. will decide your case, and we will write to you with the final
MAY I MAKE AN OFFER? decision.
WHEN WILL I GET AN ANSWER? If we approve your offer, we will release any liens as provided
Currently, you may make an offer in compromise if you:
We will send you an acknowledgment letter after we receive by the terms and conditions relative to your offer.
• Have a tax or fee liability on a closed account, your application. We will do our best to review your offer and If we are unable to approve your offer, we may be able to
• Are no longer associated with the business that incurred make a recommendation within 30 days of receiving your recommend other options for you. In most cases, we will
the liability or a similar business, completed application. The process may take longer if your also return your deposit (without interest), at your request.
• Do not dispute the amount of tax or fee you owe, and account is more complex, your application is incomplete, or if However, we cannot return deposits in cases of fraud or asset
we need additional information.
• Cannot pay the full amount you owe in a reasonable concealment. Also, if you agreed to an installment plan but
amount of time. Please note : If you are making payments under an installment missed your scheduled payments, we may apply payments
payment agreement or earnings- withhold order, you must made toward your liability.
Effective January 1, 2009, until January 1, 2028, we will also
continue these payments while we review your offer. In most
consider an offer in compromise for:
cases, we will not initiate new collection action while your offer
• Open and active businesses that have not received is pending, unless delaying collection activity jeopardizes our
reimbursement for the taxes, fees, or surcharges owed; ability to collect the liability.
• Successors of businesses that may have inherited tax
liabilities from their predecessors; and HOW ARE OFFERS EVALUATED?
• Consumers who are not required to hold a seller’s permit We will evaluate your offer based on the facts and
but incurred a use tax liability. circumstances of your liability and financial situation, and we
will take the following factors into consideration:
However, we may require you to sign a collateral agreement
and agree to remain current on all tax returns filed for the next
five years.
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WHERE CAN I GET AN OIC APPLICATION? FOR MORE INFORMATION
Applications are available from the local CDTFA office or Internet: www.cdtfa.ca.gov
division handling your account, our website, and through our
Customer Service Center: 1-800-400-7115 (TTY:711)
Customer Service Center. Representatives can assist you Monday through Friday from 7:30 a.m. to
5:00 p.m. (Pacific time), except state holidays.
MORE OIC DETAILS
If my offer is turned down because of my financial situation, Offer in Compromise Section: 1-916-322-7931
are there other options for resolving my liability?
SALES AND USE TAX OFFICES
Yes. We can discuss your account with you to find the most
Telephone Telephone
appropriate resolution. For example, if we determine that you City City
could make monthly payments that would total more than the Number Number
amount of your offer, we may be able to set up an installment Bakersfield 1-661-395-2880 Rancho Mirage 1-760-770-4828
payment agreement for you. Cerritos 1-562-356-1102 Redding 1-530-224-4729
My IRS/FTB/EDD OIC has been accepted. Will CDTFA Culver City 1-310-712-1210 Riverside 1-951-680-6400
automatically approve my offer? Diamond Bar 1-626-480-7200 Sacramento 1-916-227-6700
No. We will evaluate your offer in the manner described in this El Centro 1-760-352-3431 Salinas 1-831-754-4500
brochure.
Fairfield 1-707-862-3501 San Diego 1-858-385-4700
Can I make payments on the offered amount? Fresno 1-559-440-5330 San Francisco 1-415-356-6600
Depending on your situation, and at our discretion, we may Glendale 1-818-543-4900 San Jose 1-408-277-1231
be able to set up an installment payment agreement for you. Irvine 1-949-440-3473 Santa Rosa 1-707-890-6267
However, the full amount offered must be paid within
Oakland 1-510-622-4100 Ventura 1-805-856-3901
12 months.
Will my prior payments be credited toward the amount of my The offices listed are current as of the publication date. Office contact
information is available on our website and from our Customer Service Center.
offer?
No. While we will take prior payments into account when
For Out-of-State Accounts 1-916-227-6600
evaluating your offer, they will not be credited toward the total
amount you offer. Other Taxes and Fees
Special Taxes and Fees 1-800-400-7115
If my offer is denied, can I choose to apply my deposit to my
Timber Yield Tax 1-916-321-5180
liability?
Yes. In this case, the date you made the deposit will count Taxpayers’ Rights Advocate
as the effective date of your payment. However, if someone Call toll-free: 1-888-324-2798
else made the payment for you, you must obtain their written
approval before we can apply the payment to your liability.
Publication 56 • April 2024
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