The State of California’s Franchise Tax Board (FTB) like the IRS has an “offer in compromise” program for those who can’t pay their taxes. The OIC (offer in compromise) program allows you to offer a lesser amount for “payment of an undisputed tax liability.”
Sure, you could look up the California OIC program on the Internet on your own, and act on it, but should you?
I suggest you get professional guidance. I think you need a professional especially because the California OIC is for a “undisputed” tax liability. My first question is do you really want to throw in the towel? Perhaps you don’t really owe what the FTB says you owe? This is why you need to talk to a tax professional.
Even if you go ahead with the California OIC program it’s not easy or simple. Here are the steps the FTB says you must take:
- You must explore payment options including a payment plan.
- You must have filed all required tax returns. And the third condition really stands out:
- You must agree with the amount the FTB says you owe.
That third condition is something you really need to think about.
The OIC also has other conditions you should discuss with a tax professional.
The FTB will want to know about your ability to pay and the value of your assets, your income, even the potential that your circumstances can change. You really need professional guidance to answer these questions.
Also, the FTB wants a lump sum payment.
I think you’ll agree — you don’t want to do this on your own.
Disclaimer: Alan Mendelson is a well-known TV consumer news reporter who reports on tax issues. You should seek professional advice if you have tax questions or issues.