OFFER IN COMPROMISE For individuals and businesses who cannot pay the full tax or fee balance they owe
| 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? WHEN DO I PAY?
Generally, we will recommend acceptance of your offer if we find If our OIC Section recommends acceptance of your offer, staff
that the amount you propose to pay represents the maximum will contact you, in writing, and ask you to pay the full amount
amount we can expect to collect from you in a reasonable period you proposed. You may fund your offer with a lump-sum
of time, typically five to seven years. We will not accept your offer payment, or you may enter into a written agreement to make
if you have assets or income available to fully pay your liability. payments toward the offered amount at the discretion of the
OIC Section based on your financial situation.
HOW DO I APPLY? If you choose to pay the full amount offered in a lump-sum
You must complete an Offer in Compromise Application payment, your payment will be held as a deposit while the
(CDTFA-490 for individuals; CDTFA-490-C for all others). After final review takes place. You may choose to have your deposit
completing the application, you should submit it along with returned to you or applied toward your liability should your
supporting documentation (described in the application) to OIC request be denied. However, if you choose to make
the local CDTFA office or division that handled your account installment payments toward the offered amount and fail
(see reverse). That office will forward your request to the Offer to remit your scheduled payments, your payments will be
The California Department of Tax and Fee Administration’s in Compromise Section for evaluation. You are not required to retained by the CDTFA and applied toward your liability.
(CDTFA’s) Offer in Compromise Program provides a payment submit any payment with your offer.
alternative for individuals and businesses who cannot pay their WHAT ARE THE FINAL STEPS?
tax or fee liability in full.
WHEN WILL I GET AN ANSWER? After the OIC Section recommends acceptance of your offer
We will send you an acknowledgment letter after we receive and you have made the payment described above, your case
WHAT IS AN OFFER IN COMPROMISE? your application. We do our best to review your offer and will be decided by CDTFA management. Liabilities for tax
An offer in compromise (OIC) is a proposal to pay CDTFA an make a recommendation within 180 days of receiving your and fee programs with no statutory provision for an OIC are
amount that is less than the full tax or fee liability due. If you completed application. The process may take longer if your submitted to the Attorney General’s Office for a final decision.
make an offer and we accept it, you will no longer be liable for account is more complex, your application is incomplete, or if If your offer is approved, we will notify you, in writing, and
the full amount due and we will release any related tax liens as we need additional information. release any liens as provided by the terms and conditions
provided by the terms and conditions relative to your offer. relative to your offer.
Please note: If you are making payments under an installment
payment agreement or earnings- withhold order, you must If your offer is not approved, we will notify you in writing. We
MAY I MAKE AN OFFER? continue these payments while we review your offer. Generally, may also recommend an alternative course of action that is
Currently, you may make an offer in compromise if you: we will not initiate new collection action while your offer is appropriate for your situation. We will also return your deposit,
• Have a tax or fee liability on a closed account, pending, unless delaying collection activity jeopardizes our without interest, if you elected to remit a lump-sum payment
• Are no longer associated with the business that incurred ability to collect the liability. of the offered amount.
the liability or a similar business,
• Do not dispute the amount of tax or fee you owe, and HOW ARE OFFERS EVALUATED?
• Cannot pay the full amount you owe in a reasonable We will evaluate your offer based on the facts and circumstances
amount of time. of your liability and financial situation. The following factors are
considered:
Effective January 1, 2009, through January 1, 2023, the CDTFA
will also consider an offer in compromise for open and active • Your ability to pay
businesses that have not received reimbursement for the • The amount of equity in your assets
taxes, fees, or surcharges owed; successors of businesses that • Your present and future income and expenses
may have inherited tax liabilities from their predecessors; and • Whether your circumstances are likely to change
consumers, who are not required to hold a seller’s permit, but
incurred a use tax liability. However, certain conditions apply, • Whether your liability was due to tax evasion or fraud
such as signing a collateral agreement prior to approval of an We may use both public and private sources of information to
offer and agreeing to remain current on all tax returns filed verify your financial condition.
during the succeeding five-year period.
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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 our Customer Customer Service Center: 1-800-400-7115 (TTY:711)
Service Center. See reverse for contact information. Representatives can assist you weekdays from 8:00 a.m. to 5:00 p.m.
(Pacific time), except state holidays.
MORE OIC DETAILS
Offer in Compromise Section: 1-916-322-7931
If my offer is turned down because of my financial 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 Bakersfield 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 1-310-342-1000 Sacramento 1-916-227-6700
My IRS/FTB/EDD OIC has been accepted. Will the CDTFA El Centro 1-760-352-3431 Salinas 1-831-443-3003
automatically approve my offer? Fairfield 1-707-427-4800 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 1-707-576-2100
Rancho Cucamonga 1-909-257-2900 Ventura 1-805-677-2700
Will my prior payments be credited toward the amount of my
Rancho Mirage 1-760-770-4828 West Covina 1-626-480-7200
offer?
No. While we will take prior payments into account when The offices listed are current when the publication was written. Office 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
If my offer is denied, can I choose to apply my deposit to my Centralized Collections 1-916-445-3670
liability?
Other Taxes and Fees
Yes. If you choose to do so, the date you made the deposit will
Special Taxes and Fees 1-800-400-7115
count as the effective date of your payment. However, if the
deposit was posted by a third party, you must obtain their written Timber Yield Tax 1-916-274-3330
approval before we can apply the payment to your liability. Taxpayers’ Rights Advocate
Call toll-free: 1-888-324-2798
Publication 56 • January 2018
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