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Offer
in
Compromise
For individuals and businesses
who cannot pay the full tax
or fee balance they owe
State Board of Equalization
Publication 56 • LDA • March 2011
For important privacy information, click here.
T
he Board of Equalization’s (BOE) Offer in pose to pay represents the maximum amount we can We may use both public and private sources of
Compromise Program provides a payment expect to collect from you in a reasonable period of information to verify your financial condition.
alternative for individuals and businesses time, typically five to seven years. We will not accept When do I pay?
who cannot pay their tax or fee liability in full. your offer if you have assets or income available to
If our OIC Section recommends acceptance of
What is an offer in compromise? fully pay your liability.
your offer, staff will contact you, in writing,
An offer in compromise (OIC) is a proposal to pay How do I apply? and ask you to pay the full amount you
BOE an amount that is less than the full tax or fee You must complete an Offer in Compromise Application proposed. You may fund your offer with a
liability due. If you make an offer and we accept (BOE-490 for individuals; BOE-490-C for all others). lump-sum payment, or you may enter into a
it, you will no longer be liable for the full amount After completing the application, you should submit written agreement to make payments toward
due and we will release any related tax liens as it along with supporting documentation (described in the offered amount at the discretion of the OIC
provided by the terms and conditions relative to the application) to the local field office or department Section based on your financial situation.
your offer. that handled your account (see reverse). That office If you choose to pay the full amount offered in a
May I make an offer? will forward your request to the Offer in Compromise lump-sum payment, your payment will be held
Section for evaluation. You are not required to submit as a deposit while the final review takes place.
Currently, you may make an offer in compromise
any payment with your offer. You may choose to have your deposit returned
if you:
• Have a tax or fee liability on a closed When will I get an answer? to you or applied toward your liability should
We will send you an acknowledgment letter after we your OIC request be denied. However, if you
account,
receive your application. We do our best to review choose to make installment payments toward
• Are no longer associated with the business
your offer and make a recommendation within the offered amount and fail to remit your
that incurred the liability or a similar
180 days of receiving your completed application. scheduled payments, your payments will be
business,
The process may take longer if your account is more retained by the BOE and applied toward your
• Do not dispute the amount of tax or fee you liability.
owe, and complex, your application is incomplete, or if we
need additional information. What are the final steps?
• Cannot pay the full amount you owe in a
reasonable amount of time. Please note: If you are making payments under After the OIC Section recommends acceptance
an installment payment agreement or earnings- of your offer and you have made the payment
Effective January 1, 2009, through January 1,
withhold order, you must continue these payments described above, your case will be decided by
2013, the BOE will also consider an offer in com-
while we review your offer. Generally, we will not BOE management or the elected Members of
promise for open and active businesses that have
initiate new collection action while your offer is pend- the Board. Liabilities for tax and fee programs
not received reimbursement for the taxes, fees,
ing, unless delaying collection activity jeopardizes with no statutory provision for an OIC are
or surcharges owed; successors of businesses
our ability to collect the liability. submitted to the Attorney General’s Office for a
that may have inherited tax liabilities from
final decision. If your offer is approved, we will
their predecessors; and consumers, who are not How are offers evaluated?
notify you, in writing, and release any liens as
required to hold a seller’s permit, but incurred We will evaluate your offer based on the facts and
provided by the terms and conditions relative to
a use tax liability. However, certain conditions circumstances of your liability and financial situation.
your offer.
apply, such as signing a collateral agreement The following factors are considered:
prior to approval of an offer and agreeing to If your offer is not approved, we will notify
• Your ability to pay
remain current on all tax returns filed during the you in writing. We may also recommend an
• The amount of equity in your assets alternative course of action that is appropriate
succeeding five-year period.
• Your present and future income and expenses for your situation. We will also return your
Which offers are accepted? • Whether your circumstances are likely to change deposit, without interest, if you elected to remit
Generally, we will recommend acceptance of • Whether your liability was due to tax a lump-sum payment of the offered amount.
your offer if we find that the amount you pro- evasion or fraud
Publication 56 • March 2011
Where can I get an OIC application? For More Information
Applications are available from the local field Internet: www.boe.ca.gov/oic/oicomp.htm
office or department handling your account, our Taxpayer Information Section:
800-400-7115 (TTY: 711)
website, and our Taxpayer Information Section.
See reverse for contact information. Representatives can assist you weekdays from
8:00 a.m. to 5:00 p.m. (Pacific time), except state
More OIC Details holidays.
If my offer is turned down because of my financial Offer in Compromise Section: 916-322-7931
situation, are there other options for resolving my Sales and Use Tax Field Offices
liability? City Area Code Number
Yes. We can discuss your account with you and Bakersfield 661 395-2880
determine the most appropriate resolution. For Culver City 310 342-1000
example, if we determine that you could make El Centro 760 352-3431
monthly payments over time that would exceed Fresno 559 440-5330
the amount of your offer, we will help you Irvine 949 440-3473
establish an installment payment agreement. Norwalk 562 466-1694
Oakland 510 622-4100
My IRS/FTB/EDD OIC has been accepted. Will the
Rancho Mirage 760 770-4828
Board automatically approve my offer?
Redding 530 224-4729
No. We will evaluate your offer in the manner Riverside 951 680-6400
described in this brochure. Sacramento 916 227-6700
Salinas 831 443-3003
Can I make payments on the offered amount?
San Diego 619 525-4526
Yes. However, the full amount offered is San Francisco 415 356-6600
required within 12 months. San Jose 408 277-1231
San Marcos 760 510-5850
Will my prior payments be credited toward the
Santa Rosa 707 576-2100
amount of my offer?
Suisun City 707 428-2041
No. While we will take prior payments into Van Nuys 818 904-2300
account when evaluating your offer, they will Ventura 805 677-2700
not be credited toward the total amount you West Covina 626 480-7200
offer.
The field offices listed are current when the publication
If my offer is denied, can I choose to apply my was written. Field office contact information is available
on our website and from our Taxpayer Information
deposit to my liability? Section.
Yes. If you choose to do so, the date you made For Out-of-State Accounts
the deposit will count as the effective date of Centralized Collections 916 445-3670
your payment. However, if the deposit was Other Taxes and Fees
posted by a third party, you must obtain their Special Taxes and Fees 800 400-7115
written approval before we can apply the Timber Yield Tax 916 274-3330
payment to your liability. Private Railroad Car Tax 916 322-2323
Taxpayers’ Rights Advocate
Call toll-free: 888 324-2798
