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Form 12A018 (03/17) KENTUCKY DEPARTMENT OF REVENUE
Commonwealth of Kentucky OFFER IN SETTLEMENT APPLICATION
DEPARTMENT OF REVENUE
CHECKLIST

I. BEFORE COMPLETING THE APPLICATION, PLEASE VERIFY THAT YOU ARE ELIGIBLE
TO SUBMIT AN OFFER IN SETTLEMENT!
Check (a) or (b) to each question below. If you check (a), you may proceed to the next question.
If you check (b) to any question, you are not eligible to submit an offer at this time.

1. ¨ a. I/we have filed all required income tax returns for all required tax years OR I/we had no filing requirement for tax
year(s) ____________________________________ Reason(s) ___________________________________

¨ b. I/we have not filed all required income tax returns for all required tax years.

You may not submit an offer until you have filed all required income tax returns!

2. ¨ a. I/we do not have an open personal bankruptcy proceeding at this time.

¨ b. I/we currently have an open bankruptcy or plan to file in the immediate future.

You may not submit an offer at this time!

3. ¨ a. I/we have made all current year estimated tax payments OR have no estimated tax filing requirement this year.

¨ b. I/we have not made all required current year estimated tax payments.

You may not submit an offer until you have made all required payments!

II. DOCUMENTATION THAT MUST BE SUBMITTED WITH THE OFFER IN SETTLEMENT
APPLICATION:
Please check that you are submitting the information required below. Offers that do not include all information
will be deemed invalid and returned to you. Additional information may be requested from you at a later date.

¨ a. STATEMENT OF FINANCIAL CONDITION FOR INDIVIDUALS, Form 12A638(I) (signed & dated)
(Failure to fill this form out in its entirety, with complete and accurate financial disclosure, may result in offer rejection.)
¨ b. COPIES OF ALL BANK STATEMENTS (on all household accounts for the most recent 3 months)
¨ c. PROOF OF INCOME (copies of the last 3 months of pay stubs for all household earners)
¨ d. COPY OF MOST RECENT STATE & FEDERAL INCOME TAX RETURNS (include W-2’s, 1099’s & all schedules)
¨ e. IF YOU ARE SELF-EMPLOYED, YOU MUST ALSO SUBMIT A STATEMENT OF FINANCIAL CONDITION FOR
BUSINESSES, Form 12A639 (Plus the most recent corporation tax return, most recent profit/loss statement and all
business bank accounts for the most recent 3 months.)
¨ f. COPY OF POWER OF ATTORNEY IF REPRESENTED BY SOMEONE OTHER THAN YOURSELF.
¨ g. A RECENT COPY OF A CREDIT REPORT.

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Form 12A018 (03/17) KENTUCKY DEPARTMENT OF REVENUE
Commonwealth of Kentucky OFFER IN SETTLEMENT APPLICATION
DEPARTMENT OF REVENUE
FREQUENTLY ASKED QUESTIONS

1. How does submitting an acceptable offer benefit 8. How will the DOR consider my offer? A DOR officer
me? If the Department of Revenue (DOR) accepts your will examine your assets, liabilities, and your ability to pay.
offer, and you maintain the terms of compliance (see terms We may request further documentation and will verify the
and conditions on page 5), not only do you resolve your information you provide. If our review of your financial
case for less than the actual amount owed, but you also condition indicates you have the ability to pay more than you
get a “fresh start” towards tax compliance with the DOR. offered, your offer will be rejected. The officer will make a
recommendation to accept or reject your offer, or may decide
2. Do I need an accountant, attorney, or consultant to a larger amount is needed. It should be strictly understood that
help me submit an offer? Our Offer in Settlement forms and the acceptance of any offer is at the sole discretion of DOR.
program procedures have been designed to be self-explanatory.
You have all of the information we need to help us make an 9. Does the DOR suspend collection activity while
informed decision about your offer, and most taxpayers should reviewing my offer? No. Any ongoing collection activity
be able to complete the forms without professional assistance. before an offer is submitted (payments, levies, etc.) is generally
DOR officials are available Monday - Friday to assist you with enforced while the offer is in review. If there is any indication
any questions you may have, and to assist you through the the offer was submitted in order to delay any further
offer process. You are entitled to hire the services of anyone collection activity, we will continue collection efforts. If you
you wish to represent you; however, DOR must have proof have special circumstances you feel the DOR should consider
of their power of attorney privileges submitted with the offer. in reference to any current collection activity, you may submit
a request in writing with your offer. To protect our interest,
3. What happens if I submit an offer without all the Commonwealth may file a Notice of State Tax Lien,
of the required documentation on the checklist, or issue a Final Notice, or Notice of Assessment after the offer
if I have not met the prerequisites for submitting is received, if these actions have not already been taken.
an offer? You may resubmit the offer with all of
the required documentation listed on the checklist. 10. How will I know if my offer has been accepted or rejected?
The DOR Officer assigned to review your offer will notify you
4. Can I use the IRS Offer in Compromise forms by mail regarding the status of your offer. The date of the letter
to submit an offer to Kentucky? No. You must submit will be considered the official date of acceptance or rejection.
the required Kentucky Department of Revenue Offer
in Settlement and Statement of Financial Condition 11. Can I withdraw my offer once I have submitted
forms. See the checklist and instructions for all it to the DOR? Yes. You may withdraw your offer from
requirements and documentation required with the offer. consideration at any time, by written notification or by phone.
Any amount paid with the offer will be applied to the liability.
5. What is “doubt as to collectability?” Doubt as to
collectability means that you agree you owe the liability, but 12. May I submit another offer if my first is rejected?
cannot pay the entire amount. There is doubt that the DOR Unless notified otherwise from a DOR Officer, you
could collect the full amount due. The DOR cannot legally may submit a new offer. It is unlikely that the second
accept an offer based on doubt as to collectability if there offer will be given more favorable consideration than
is no doubt the DOR could collect the full amount owed. the original unless the amount of the offer is increased.

6. What is “doubt as to liability?” Doubt as to liability 13. What forms of payment do you accept for a
means that you do not agree that you owe the tax liability, settlement? We accept personal checks, cashiers checks,
and are making an offer to settle the case based on this Visa, MasterCard, and debit cards. There is a 2.5% fee for
doubt. The DOR cannot legally accept a settlement based credit card payments. We can accept payments electronically
on doubt as to liability when the amount has already been over the phone for personal checks, debit and credit cards.
decided in court, or if you cannot provide adequate proof
of the doubt. You must include detailed documentation 14. Where do I file the offer in settlement? The offer
describing why you believe you do not owe the liability. can be submitted to the collector handling your case, or
you can mail the offer and all required documentation to:
7. How do I know how much to offer? Generally, the
amount of your offer must equal or exceed the amount of money Division of Collections
the DOR could otherwise reasonably collect from you, either Offer in Settlement Section
immediately or through a pay agreement. However, each offer P.O. Box 5222
is reviewed on an individual, case-by-case basis. You should Frankfort, Kentucky 40602
explore all possible options for funding your offer, including Phone: (502) 564-4921
but not limited to liquidating assets, borrowing from family or Website: www.revenue.ky.gov
friends, and obtaining financing from a lending institution. You Fax: (502) 564-7348
cannot include refunds the DOR may owe you, or payments
you have previously made, toward your offer amount.

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Form 12A018 (03/17) KENTUCKY DEPARTMENT OF REVENUE
Commonwealth of Kentucky OFFER IN SETTLEMENT APPLICATION
DEPARTMENT OF REVENUE INSTRUCTIONS

1. PREREQUISITES FOR SUBMITTING AN OFFER Item 10—Reasons for Settling—The DOR cannot legally accept
a settlement based on doubt as to collectability if there is no doubt
a. Operating Business—No offer will be reviewed or accepted we can collect the full amount owed. DOR cannot legally accept a
on an operating business. The Department will only review and settlement based on doubt as to liability when the amount owed has
consider offers on a closed business. already been decided in court.
b. Application Fee—All applications must be accompanied by a
$500.00 application fee. This fee is non-refundable and will be Item 11—It is important that you read and clearly understand all
applied to your tax liability. of the terms and conditions of the offer.
c. Minimum Case Balance—Offers will only be reviewed and Item 12—By signing Item 12a or 12b, you agree that:
considered on cases with a balance exceeding $3,000.00. If your a. You give up any overpayments (refunds) for all tax periods prior
case balance does not exceed $3,000.00 you will need to contact to and including the tax year that we accept your offer.
the Division of Collections @ 502-564-4921, ext. 5354.
b. Any statutory period for assessment and collection of the amount
d. Tax Compliance—You must file all tax returns that you were owed is suspended while the offer is pending. The statute of
legally required to file prior to submitting an offer. If you had no limitations will extend by the amount of time in OIS plus one
filing requirement for a specific year or period because you were year.
not legally required to file the return, you must note the period(s)
on the checklist (page 1), item 1a. c. You will not contest, in court or otherwise, the amount owed if
e. Bankruptcy Proceedings—If you currently have an open the DOR accepts your offer.
bankruptcy proceeding, we cannot consider an offer. Once the d. The DOR can reinstate the entire amount owed if you do not
bankruptcy is closed or discharged, you may submit an offer. comply with all the terms and conditions of the offer, including
f. Estimated Tax Payments—You must be current on all required the requirement to file returns and pay taxes for five years.
estimated tax payments. 3. GENERAL PROGRAM INFORMATION
2. LINE BY LINE INSTRUCTIONS FOR OFFER PAGES 4 & 5 Background—Kentucky Revised Statute 131.030(3) allows delegated
Item 1—List your full name, address and social security number. officials of the Kentucky DOR to settle a tax liability for less than the
full amount due. The term “tax liability” is the total amount a taxpayer
Item 2—List the full name and social security number of a spouse or owes including taxes, penalties, interest, and other additional amounts
other person jointly submitting this offer with you. required by law.
Item 3—If applicable, enter the name and federal identification DOR Policy—The goal of this program is a settlement which is in
number of the business for which you are offering to resolve a tax the best interest of the Commonwealth. The DOR will accept an offer
debt. in settlement when it is unlikely that we can collect the full amount
Item 4—Check this box if you are/were a corporate officer or owed, and when the amount you offer reasonably reflects collection
equivalent office-holder of the business, and are offering to resolve potential. The goal is to collect the most we can at the earliest possible
your personal liability for the trust taxes and/or officer assessable time, at the least cost to the Commonwealth.
taxes for that business.
Notice About Co-obligors—The parties who are liable for a tax
Item 5—Enter the total amount you are offering to settle your debt, liability with you are co-obligors. Unless a co-obligor signs the offer
not including any amounts already paid to or collected by the DOR as taxpayer-proponent, the DOR may pursue them for the remaining
prior to this offer. amount due after accepting your offer. Under Kentucky law, corporate
officers or equivalent office-holders are jointly and individually liable
Item 6—Specify the timeframe in which you plan to pay the offered for certain trust taxes. Kentucky Revised Statutes also hold business
amount. You should pay the full offered amount in the shortest time partners jointly and individually liable for all types of taxes due from
possible. The quicker you pay, the less interest your debt will accrue. the business. Kentucky law also holds husbands and wives who file
The DOR charges interest from the date of acceptance until the date joint or combined income tax returns jointly and individually liable for
you pay the full amount offered. the tax due on the return.
Item 7—Disclose where the source of the funds to pay the offer will Possible Additional Requirements—We may require that you sign
be coming from, such as personal savings, borrowing from family or a written agreement that requires you to pay a percentage of future
friends, liquidating an asset, etc. earnings, and/or give up certain present or potential tax benefits.
Item 8—Check the tax type(s) that you offer to settle. If the type
of liability is not on the form, specify the type of tax and periods If We Reject Your Offer—If the offer is rejected, you will receive
of liability in “OTHER TAX TYPES.” Example: Omitted Tangible written notice explaining why the offer was unacceptable. If you submit
Property Tax, 12/06. an offer based on doubt as to collectability and the DOR finds you can
pay more than the amount offered, the offer will be rejected. If you
Item 9—Provide a detailed explanation of your circumstances, submit an offer based on doubt as to liability and DOR finds that you
supplying additional pages or documentation if necessary. It is your are still liable, the offer will be rejected. If you do not provide accurate
responsibility to show the DOR why it would be in the best interest and complete financial disclosure, or you are not in compliance with
of the Commonwealth to accept your offer. filing and payment requirements, the offer will be rejected.
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 Form 12A018 (03/17)                                                                                                                          KENTUCKY DEPARTMENT OF REVENUE
 Commonwealth of Kentucky                OFFER IN SETTLEMENT APPLICATION
 DEPARTMENT OF REVENUE   

  1.  Taxpayer Name    _______________________________________   Social Security Number _______ – ______ – ________
     Address  ____________________________________________                                                                                                          Daytime Telephone Number       ______________________
     City  ________________   State  ______  Zip Code   _________                                                                                                   Cell Number   __________________________________
      E-mail address   ________________________________________________________________________________________
  2.  Taxpayer Name (if joint offer)  ____________________________                                                                                                  Social Security Number _______ – ______ – ________
     Address  ____________________________________________                                                                                                          Daytime Telephone Number       ______________________
     City  ________________   State  ______  Zip Code   _________                                                                                                   Cell Number   __________________________________
      E-mail address   ________________________________________________________________________________________
  3.  Business Name _______________________________________                                                                                                         Federal ID Number          ________  –  ___________________
  4.  ¨  Check here if you are a corporate officer or equivalent office-holder offering to settle your personal liability for trust taxes for 
           the business listed above.
                              TO THE COMMISSIONER OF THE DEPARTMENT OF REVENUE:
  5.  I / we offer to pay the amount of  $________________                                                                                               (The offer must be $500 or greater.)
  6.  Payment terms:      ¨   Full offered amount is enclosed.                                                                                           ¨    Application fee of $500 is enclosed.
    Payment will be made within:     ¨  30-days                                                                                               ¨  60-days ¨  90-days         ¨  other (specify)  ________________   of acceptance. 
  7.  I / we shall obtain the funds to make this offer from following source(s): ___________________________________________________
  8.  I / we (includes all types of taxpayers) submit this offer to settle the tax liabilities plus any interest, penalties, additions to tax and additional 
      amounts required by law for the type tax(s) and period(s) marked below. Mark “X” for each tax type, and fill in the correct periods and tax 
      types. (Example: Tangible Property Tax, 12/06)

      ¨  INDIVIDUAL INCOME TAX for years:  _________________________________________________________________________
      ¨  WITHHOLDING TAX for periods:  ____________________________________________________________________________
      ¨  SALES AND USE TAX for periods: ___________________________________________________________________________
      ¨  COAL SEVERANCE TAX for periods:   ________________________________________________________________________
      ¨  OTHER TAX TYPES (be specific) for periods:  __________________________________________________________________
            _______________________________________________________________________________________________________
  9.  Explanation of your circumstances: If the offer is based on doubt as to liability, you must provide a detailed explanation of why you believe 
      you do not owe the liability. If the offer is based on doubt as to collectability, explain the circumstances which prevent you from paying the 
      liability in full. Attach additional sheets or documentation, if needed.
    ___________________________________________________________________________________________________________
    ___________________________________________________________________________________________________________

 10.  I / we submit this offer for the reason(s) marked below: (see instructions)                                                                                                   FOR OFFICIAL USE ONLY
      ¨    DOUBT AS TO COLLECTABILITY                                                                                                                                       CASE NUMBER: ______________________________
          (I agree that I owe the liabilities covered by this offer, but I cannot pay.)                                                                                     ______________________________________________
      ¨    DOUBT AS TO LIABILITY                                                                                                                                            RECEIVED: ______  /______  /____________________
          (I do not believe I owe this tax.)                                                                                                                                AMOUNT PAID: $  ____________________________
                                                                                                                                                                            AMENDED:              _____ YES    _____ NO
     YOU MUST READ AND SIGN PAGE 5 FOR THIS OFFER TO BE VALID!

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Form 12A018 (03/17)
Commonwealth of Kentucky KENTUCKY DEPARTMENT OF REVENUE
DEPARTMENT OF REVENUE OFFER IN SETTLEMENT APPLICATION
11. TERMS AND CONDITIONS: By submitting this offer, I / we have read, understand and agree to the following:
a. I / we voluntarily submit all payments made on this offer to the Department of Revenue (DOR).
b. The DOR will apply payments made under the terms of this offer in the best interest of the Commonwealth.
c. If the DOR rejects the offer or I / we withdraw the offer, the DOR will not refund any amount paid with offer. The date the offer was made will be
considered the date of payment.
d. I / we will comply with all Kentucky Revised Statutes and Administrative Regulations relating to filing my / our returns and paying my / our
required taxes for five years from the date the DOR accepts the offer.
e. I / we waive and agree to the suspension of any statutory period of limitation (time limits provided for by law) for DOR assessment and collection of
the tax liability for the tax periods checked in Item 8.
f. The DOR will keep all payments and credits made, received, offset, or otherwise applied to the amount being settled before this offer was submitted.
The DOR will also keep any payments made under the terms of an installment agreement and / or offset from any source while this offer is
pending.
g. The DOR will keep any refund, including interest, due to me / us because of overpayment of any tax or other liability, for tax periods
extending through the calendar year that the offer is paid. For the same period of time, if any part of the tax liability covered by this offer
is for individual income tax or withholding tax, any federal income tax refund that may become due may be offset pursuant to 26 USC
§6402(e). These conditions do not apply if the offer is based only on doubt as to liability.
h. I / we will return to the DOR any refund identified in Item “g” received after submitting this offer. This condition does not apply if the offer is based
only on doubt as to liability.
i. The total amount DOR can collect under this offer cannot be more than the full amount of the tax liability.
j. I / we understand that I / we remain responsible for the full amount of the tax liability unless and until DOR accepts the offer in writing and I / we
have met all the terms and conditions of the offer. DOR will not remove the original amount of the tax liability from its records until I / we have met
all the terms and conditions of the offer.
k. I / we understand that the tax I / we offer to settle is, and will remain, a tax liability until I / we meet all the terms and conditions of this offer. If I /
we file bankruptcy before the terms and conditions of this offer are completed, any claim the DOR files in the bankruptcy proceeding will be a tax
claim.
l. Once the DOR accepts the offer in writing, I / we have no right to contest, in court or otherwise, the amount of tax liability.
m. The offer is pending starting with the date an authorized DOR official signs this form and accepts my / our waiver of the statutory period of
limitation. The offer remains pending until an authorized DOR official accepts, rejects or withdraws the offer in writing.
n. The waiver and suspension of any statutory period of limitation for assessment and collection of the amount of tax liability described in Item 8
continues to apply: (i) while the offer is pending (see Item “m” above);
(ii) during the time I/we have not paid all the amount offered;
(iii) during the time I/we have not completed all terms and conditions of the offer; and
(iv) for one additional year beyond the time periods identified in (i), (ii) and (iii) above.
o. If I / we fail to meet any of the terms and conditions of the offer, the offer is in default, and the DOR may:
(i) immediately file suit to collect the entire unpaid balance of the offer;
(ii) immediately file suit to collect an amount equal to the original amount of the tax liability as liquidated damages, minus
any payments received under the terms of this offer;
(iii) disregard the amount of the offer and apply all amounts paid under the offer against the original amount of tax liability;
(iv) file suit or levy to collect the original amount of tax liability, without further notice of any kind.
p. I / we understand and agree that this offer is on behalf of only those taxpayers who sign as taxpayer - proponents in Item 12a or 12b. The Commonwealth
of Kentucky reserves all rights of collection against co-obligors if any (see instructions on page 3).
q. I/we have remitted the $500 processing fee with this offer. I/we understand this will not be refunded and will be applied to my/our outstanding
liability with the Commonwealth, regardless of acceptance or rejection of offer.
12. MANDATORY SIGNATURE(S): Under penalties of perjury, I declare that I have examined this offer, including accompanying
schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete.

FOR OFFICIAL USE ONLY
_________________________________________________ I accept the waiver of the statutory period of limitations for the
a. Signature of Taxpayer-proponent Date Department of Revenue as described on Page 2 , Item 11 (e).
_______________________________________________________
Signature of Authorized Department of Revenue Official
_________________________________________________
_______________________________________________________
b. Signature of Taxpayer-proponent Date
Title Date

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