The Department of Treasury has announced that it is providing an "offer in compromise" program beginning Jan. 1, 2015. The program allows for a taxpayer to submit an offer to lower the amount of a tax liability for less than the full amount due. A tax liability includes the tax and any related interest and penalty. A summary of the official guidelines, "Guidelines for Offer in Compromise Program, 12/16/2014", is as follows:
To submit an "offer in compromise", one or more of the following grounds must exist:
The taxpayer has received an offer in compromise from the IRS for the same tax periods for which the taxpayer is requesting state relief. Only tax debt for individual income tax or for corporate income tax is eligible for compromise under this ground.
Key items of the submission process:
Once an offer is approved, the payment of tax debt can be in one of the following ways:
Acceptance and rejection of an offer by the Department: