What is a Georgia Offer in Compromise?

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  • The Georgia Department of Revenue has a program called offer in compromise that allows a taxpayer to pay a portion of the amount of taxes they owe and have the remaining debt dismissed.
  • To submit an offer in compromise, you must complete and file Forms OIC-1 and CD-14C to the Department of Revenue.
  • If your offer gets accepted, you will be able to pay that amount and have the rest of your debt forgiven.

If you are a resident of the state of Georgia and have outstanding tax debt that you are unable to pay, you might qualify for the state’s tax relief program. This program is called an offer in compromise, and it allows taxpayers in the state to settle a tax debt for less than the amount they owe. You must submit an offer in compromise to and have it approved by the Georgia Department of Revenue.

Factors Considered for an Offer in Compromise

If you cannot pay the full amount you owe in taxes, you can submit an offer in compromise to the Georgia Department of Revenue. Each offer is reviewed individually, and those involved in the review process will look at several key factors. These include:

What is a Georgia Offer in Compromise?
  • Your ability to pay back the amount owed.
  • Your current income, as well as the potential for future income.
  • Your assets and equity.
  • Your current expenditures and any future necessary expenditures.
  • Any changed circumstances or life events that you’ve experienced recently.
  • Whether the state will be able to collect the full amount owed in a reasonable amount of time.
  • Whether approving the request for an offer in compromise is in the state’s best interest.

The state of Georgia has tools at its disposal to collect owed taxes. It can turn over a case to the state Department of Revenue to collect all taxes that a taxpayer owes. To collect the funds, the Georgia Department of Revenue collections department can garnish your wages or place liens against your property. If the state believes you are financially unable to pay the full amount of taxes you owe, it might consider accepting an offer in compromise.

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Submitting an Offer in Compromise

If you think you qualify financially for an offer in compromise, you must fill out several forms and provide the appropriate documentation. The first step is checking to make sure you don’t have any unfiled tax returns. If you do, you will need to complete them and file them with the state before you submit your offer in compromise. The Georgia Department of Revenue will not consider an offer in compromise from taxpayers who are delinquent on their tax returns.

When you determine you don’t have any outstanding tax returns to file, you can then begin the process of submitting an offer in compromise. You will need to complete Form OIC-1 and Form CD-14C, which is the collection information statement for wage earners and self-employed individuals. If you are submitting the request for business taxes, you will need to complete Form CD-14B instead of CD-14C. File these forms online, or mail them to the Georgia Department of Revenue.

Form OIC-1

Form OIC-1 is shorter and easier to complete than Form CD-14C. You will need to have certain information available when you complete it. This information includes:

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  • The reason you are submitting an offer in compromise (such as a change in your life circumstances that has rendered you unable to pay the taxes owed).
  • The tax periods and type of tax for which you are submitting an offer to settle.
  • Your current income, which will help the reviewer determine whether you qualify for low-income certification.
  • The offer you are making, which should be calculated based on the collection information form.

When you include the reason you are submitting an offer in compromise, you might claim that you have experienced an economic hardship that makes it impossible for you to pay the full amount. Other reasons include a doubt as to your liability for the amount owed or a doubt that the state’s revenue department will be able to collect the full amount within a reasonable time.

Form CD-14C

When you complete Form CD-14C, you will need to provide even more information about your financial situation. The Georgia Department of Revenue wants to know as much as possible about whether you can pay the amount owed. Accepting an offer in compromise means the state is writing off a portion of your debt as a loss, so the reviewers will look carefully at every piece of information you provide on your offer.

Start by listing all assets you own, including:

  • Vehicles
  • Real estate (commercial and residential)
  • Bank accounts
  • Investment accounts
  • Retirement accounts

If you owe money on any assets, you will also need to include information about the loan balance for each. After listing your assets, the next step is providing details about your necessary monthly expenses. Examples of these include clothing, rent or mortgage payment, utilities, food, gas for your vehicle, and other costs required for you to stay alive.

To provide what you’re spending on these expenses, you will need to include copies of your credit card statements, bank statements, and pay stubs. After completing all the lines on Form CD-14C that apply to you, the final step is calculating a reasonable offer.

Rejection of an Offer in Compromise

If the Georgia Department of Revenue doesn’t accept your offer, the reviewer might claim that your monthly expenses are higher than necessary or that your financial circumstances could change in the future. You do have the option of appealing the rejection. If you do appeal, you might want to think about offering a higher amount if you are financially able to do so.

The offer in compromise program in the state of Georgia is designed to aid residents who are struggling to pay back the taxes they owe. If you’re drowning beneath the weight of a hefty tax debt, take the first step toward being debt-free by learning more about our debt relief programs at Solvable.

 

Allison Blackham
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Allison Blackham

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