Offers in Compromise in the State of California

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Originally established by the U.S. Congress to help with tax problems on the Federal level, the Offer in Compromise Program is now available on the State level. Making an Offer in Compromise with a State Franchise Tax Board is different in several ways from making an Offer in Compromise to the IRS. We are located in Southern California, and our history of experience and expertise with tax resolution services began in the State of California. It is essential to understand the differences and the specific requirements of the California Franchise Tax Board. We possess the contacts and the connections developed over a history of consistent and respected work with the California Franchise Tax Board.

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In the past, the percentage of acceptance for Offers in Compromise was much lower with the California Franchise Tax Board when compared to the IRS acceptance rate of Offers in Compromise. However, on account of the recent recession and numerous tax challenges, the California Franchise Tax Board now accepts more Offers in Compromise then ever before. Since California is in an economic crisis, the State is going after unpaid taxes with a determined focus, attempting to raise revenue by collecting backs taxes that are owed by delinquent taxpayers. If you owe money in the form of unpaid back taxes to the California Franchise Tax Board, CONTACT US today for help.

The Franchise Tax Board processes Offers in Compromise much faster than the IRS, and California expects to be paid upon completion of the process. In addition, the Franchise Tax Board is less willing to compromise on the actual amount owed. Although they will wipe away the interest and penalties accumulated, the Franchise Tax Board often will make a counter-offer that requests the full amount originally owed. The policy of asking for the full amount owed now is enforced and emphasized by the California Franchise Tax Board on account of the economic crisis. California is in trouble, and it has put the pressure on the Franchise Tax Board to increase revenue.

What do you do if you cannot afford to pay the original amount owed? If such a case of economic plight is made, the Franchise Tax Board will review the offer. Luckily, the reviews tend to be less strict and rigid when compared to the IRS reviews. The California revenue agents emphasize fairness and tend to focus on the realistic possibility of achieving payment. If an Offer in Compromise is being worked out with the IRS at the same time as a California State Offer in Compromise, the revenue agents are more likely to take less than the expected amount. Since the State process is faster, a deposit should be made with the State. Why? — Because the deposit amount will not be included in your asset list of funds available which is provided by you to the IRS. By making a deposit with the state, you can end up paying less to the IRS

While the focus of the Federal offer is on gross income, the State offer looks to net income. Subsequently, the State assessment of assets often can be fairly different than the federal assessment of assets. Although the Franchise Tax Board’s policy is not to pursue collection while an Offer in Compromise is in progress, this is a policy and not a law. As a result, it is essential to have a respected tax professional like Peter Stephan representing you that has trusted contacts and connections within the State revenue agency and with the revenue officers. Since we have worked with California State and the California Franchise Tax Board on a multitude of cases, our reputation and our word are respected. We can attain an excellent Offer in Compromise for you with both the California State Franchise Tax Board and the IRS.

If you have a question about California State Offers in Compromise, problems with the California Franchise Tax Board, or you want to set up a consultation with the Tax Resolution Institute, please CONTACT US today.