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Tax News Offer in Compromise

The Offer in Compromise (OIC) Program offers taxpayers who do not have, and will not have in the foreseeable future, the money, assets, or means to pay their tax liability in full. It allows a taxpayer to offer a lesser amount for complete satisfaction of a nondisputed final tax liability. Our OIC program is authorized by Revenue and Tax Code (R&TC) Section 19443.

We require taxpayers to prove that the amount offered is the most we could expect to receive based on their present assets and income. In addition, we determine whether taxpayers have reasonable prospects of acquiring additional income or assets that would allow them to satisfy a greater amount of the liability than the offered amount within a reasonable period (depending on other factors, five years is usually considered a reasonable period). Furthermore, we must determine that acceptance of the offer is in the best interest of the state.

You may use the following publications to assist your clients in applying for an OIC.

  • 4905 PIT Booklet, Offer in Compromise for Individuals.
  • 4905 BCT Booklet, Offer in Compromise for Business Entities.
  • DE 999CA, Multi-Agency Form for Offer in Compromise.

You may call the OIC staff directly at 916.845.4787.

To print the publications, go to ftb.ca.gov and search for OIC.

Back to August 2010 Tax News