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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 recommend acceptance of your offer if we fnd • The amount of equity in your assets
that the amount you propose to pay represents the maximum • Your present and future income and expenses
amount we can expect to collect from you in a reasonable period
• Whether your circumstances are likely to change
of time, typically fve to seven years. We will not accept your offer
if you have assets or income available to fully pay your liability. • 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 fnancial condition.
Please see our online OIC Pre-qualifer Tool to assist you in
determining whether an OIC is right for you. WHEN DO I PAY?
*Please note: The OIC Pre-qualifer Tool is designed for closed If our OIC Section recommends acceptance of your offer, staff
businesses. If you operate an active business and are interested in will contact you, in writing, and ask you to pay the full amount
an OIC, please contact the OIC Section at 1-916-322-7931 if you you proposed. You may fund your offer with a lump-sum
have questions. payment, or you may enter into a written agreement to make
The California Department of Tax and Fee Administration’s payments toward the offered amount at the discretion of the
(CDTFA’s) Offer in Compromise Program provides a payment OIC Section based on your fnancial situation.
alternative for individuals and businesses who cannot pay their HOW DO I APPLY?
tax or fee liability in full. You must complete an Offer in Compromise Application If you choose to pay the full amount offered in a lump-sum
(CDTFA-490 for individuals; CDTFA-490-C for all others). After payment, your payment will be held as a deposit while the
completing the application, you should submit it along with fnal review takes place. You may choose to have your deposit
WHAT IS AN OFFER IN COMPROMISE? returned to you or applied toward your liability should your
supporting documentation (described in the application) to
An offer in compromise (OIC) is a proposal to pay CDTFA an the local CDTFA offce or division that handled your account OIC request be denied. However, if you choose to make
amount that is less than the full tax or fee liability due. If you (see reverse). That offce will forward your request to the Offer installment payments toward the offered amount and fail
make an offer and we accept it, you will no longer be liable for in Compromise Section for evaluation. You are not required to to remit your s cheduled payments, your payments will be
the full amount due, and we will release any related tax liens as submit any payment with your offer. retained by the CDTFA and applied toward your liability.
provided by the terms and conditions relative to your offer.
WHEN WILL I GET AN ANSWER? WHAT ARE THE FINAL STEPS?
MAY I MAKE AN OFFER? After the OIC Section recommends acceptance of your offer
We will send you an acknowledgment letter after we receive
Currently, you may make an offer in compromise if you: your application. We do our best to review your offer and make and you have made the payment described above, your case
• Have a tax or fee liability on a closed account, a recommendation within 30 days of receiving your completed will be decided by CDTFA management. Liabilities for tax
• Are no longer associated with the business that incurred application. The process may take longer if your account is and fee programs with no statutory provision for an OIC are
the liability or a similar business, more complex, your application is incomplete, or if we need submitted to the Attorney General’s Offce for a fnal decision.
• Do not dispute the amount of tax or fee you owe, and additional information. If your offer is approved, we will notify you, in writing, and
release any liens as provided by the terms and conditions
• Cannot pay the full amount you owe in a reasonable Please note: If you are making payments under an installment relative to your offer.
amount of time. payment agreement or earnings-withhold order, you must
continue these payments while we review your offer. Generally, If your offer is not approved, we will notify you in writing. We
Effective January 1, 2009, through January 1, 2023, the CDTFA may also recommend an alternative course of action that is
we will not initiate new collection action while your offer is
will also consider an offer in compromise for open and active appropriate for your situation. We will also return your deposit,
pending, unless delaying collection activity jeopardizes our
businesses that have not received reimbursement for the
ability to collect the liability. without interest, if you elected to remit a lump-sum payment
taxes, fees, or surcharges owed; successors of businesses that of the offered amount.
may have inherited tax liabilities from their predecessors; and
consumers, who are not required to hold a seller’s permit, but HOW ARE OFFERS EVALUATED?
incurred a use tax liability. However, certain conditions apply, We will evaluate your offer based on the facts and circumstances
such as signing a collateral agreement prior to approval of an of your liability and fnancial situation. The following factors are
offer and agreeing to remain current on all tax returns fled considered:
during the succeeding fve-year period.
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WHERE CAN I GET AN OIC APPLICATION? FOR MORE INFORMATION
Applications are available from the local CDTFA offce or Internet: www.cdtfa.ca.gov
division handling your account, our website, and our Customer Customer Service Center: 1-800-400-7115 (CRS:711)
Service Center. See reverse for contact information. Representatives can assist you Monday through Friday from 8:00 a.m. to
5:00 p.m. (Pacifc time), except state holidays.
MORE OIC DETAILS
Offer in Compromise Section: 1-916-322-7931
If my offer is turned down because of my fnancial situation,
are there other options for resolving my liability?
Yes. We can discuss your account with you and determine the SALES AND USE TAX OFFICES
most appropriate resolution. For example, if we determine City Phone Number City Phone Number
that you could make monthly payments over time that would Bakersfeld 1-661-395-2880 Redding 1-530-224-4729
exceed the amount of your offer, we will help you establish an Cerritos 1-562-356-1102 Riverside 1-951-680-6400
installment payment agreement.
Culver City 1-310-712-1210 Sacramento 1-916-227-6700
My IRS/FTB/EDD OIC has been accepted. Will the CDTFA El Centro 1-760-352-3431 Salinas 1-831-754-4500
automatically approve my offer? Fairfeld 1-707-862-3501 San Diego 1-858-385-4700
No. We will evaluate your offer in the manner described in this Fresno 1-559-440-5330 San Francisco 1-415-356-6600
brochure. Glendale 1-818-543-4900 San Jose 1-408-277-1231
Can I make payments on the offered amount? Irvine 1-949-440-3473 Santa Clarita 1-661-222-6000
Yes. However, the full amount offered is required within 12 months. Oakland 1-510-622-4100 Santa Rosa 1-707-890-6267
Rancho Cucamonga 1-909-257-2900 Ventura 1-805-856-3901
Will my prior payments be credited toward the amount of my
Rancho Mirage 1-760-770-4828 West Covina 1-626-671-3702
offer?
No. While we will take prior payments into account when The offces listed are current when the publication was written. Offce contact
evaluating your offer, they will not be credited toward the total information is available on our website and from our Customer Service Center.
amount you offer.
For Out-of-State Accounts 1-916-227-6600
If my offer is denied, can I choose to apply my deposit to my
liability? Other Taxes and Fees
Special Taxes and Fees 1-800-400-7115
Yes. If you choose to do so, the date you made the deposit will
Timber Yield Tax 1-916-321-5180
count as the effective date of your payment. However, if the
deposit was posted by a third party, you must obtain their written Taxpayers’ Rights Advocate
approval before we can apply the payment to your liability. Call toll-free: 1-888-324-2798
Publication 56 • March 2020
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