Make an offer on your tax debt Offer in compromise

Overview

The Offer in Compromise (OIC) program allows you to offer a lesser amount for payment of an undisputed tax liability.

Before you apply

You must have:

1. Explored payment options such as setting up a payment plan with us
2. Filed all required income tax returns
3. Agreed with the amount you owe

Eligibility

Your eligibility for an OIC is based on:

1. Your ability to pay
2. Value of your assets
3. Your current and future income
4. Your current and future expenses
5. The potential your circumstances could change
6. Whether your offer is in the best interest of the state

We consider each request based on the facts and circumstances of that case.

We evaluate your FTB offer separately from any offer you make to another state or federal agency. This includes California Department of Tax and Fee Administration (CDTFA), Employment Development Department (EDD), and IRS.

Your offer

• Must be a lump sum (no payments)
• Cannot include prior payments
• Cannot be a zero dollar offer

Offers may be approved when it’s the most we can expect to collect within a reasonable time.

How to apply

1. Complete your application and all required documentation:
   • Individuals - Offer in Compromise Booklet and Application for Individuals (4905PIT)
   • Individuals (who have tax debt with more than 1 agency) - Multi-Agency Form for Offer in Compromise (DE 999CA)
   • Businesses - Offer in Compromise Booklet and Application for Business Entities (4905BE)
2. Mail your application and all required documentation to:
   
   Franchise Tax Board
   Offer in Compromise Group MS A453
   PO Box 2966
   Rancho Cordova CA 95741-2966

Process

Once your account is assigned, we will contact you to review your application and determine the most appropriate resolution:

• If you can make monthly payments more than the amount you offered, we will work with you to set a payment plan
• If you have a temporary financial hardship, we will work with you to delay collection actions during your hardship
• A Collateral Agreement may be Required
• If your application is approved we will contact you for the next action
• You may withdraw your application at anytime

Approximate time frames

Upon receipt of your OIC, you should receive an acknowledgment letter within 2 to 4 weeks.

Generally, we will have a decision within 4 to 6 months of your account being assigned to a specialist. If your account is more complex, it may take longer.

Help

Collection actions

When you apply for an OIC, collection actions will not automatically stop.

In most cases, no new collection actions will be taken while your offer is reviewed. But if delaying collection actions risks our being able to collect what you owe, we may continue with collection actions.

Penalties and interest continue to accrue as prescribed by law.

If your offer is approved, all collection actions stop and state tax liens are released.

More information

Visit Offer in Compromise – Things You Should Know (FTB 4045) for more information.

Contact Us

Phone

916-845-4787
(outside the U.S.)
Available weekdays, 8 AM to 5 PM (Pacific Time)
Closed on state holidays

Mail

Franchise Tax Board
Offer in Compromise Group MS A453
PO Box 2966
Rancho Cordova CA 95741-2966