A USTC Offer in Compromise is the settlement of a tax liability for less than full payment. The Tax Commission will only accept an Offer in Compromise when we find we cannot collect the full amount of the tax liability. Furthermore, you have the burden of proof to justify a settlement and provide enough documentation to prove your case. You do not have a legal right to an Offer in Compromise agreement.
Who Qualifies for a USTC Offer in Compromise?
The Utah State Tax Commission will only consider an Offer in Compromise Request after a review of your assets, liabilities, income and expenses.
Who Does NOT Qualify?
You do not qualify for an Offer in Compromise if:
1. you have not filed all Utah tax returns;
2. you are involved in an open bankruptcy;
3. you can pay the tax liabilities within a reasonable amount of time; or
4. you and the Tax Commission have not thoroughly explored all
other collection options.
Ability to Pay
You must base your offer on the maximum amount of the liability you can pay. The Commission will consider several factors to determine your capacity to pay. For example:
• Liquidation of assets and ongoing payments will not fully pay the tax liability.
• A non-liable spouse has property he or she may be willing to sell.
• A non-liable third party may consider buying your business assets.
• Amounts may be collectable through the successor liability or personal assessments programs.
You must pay by certified funds within 30 days of acceptance. If you are paying with personal check or credit card, it may take an additional 30 days to satisfy your liens.
Submitting an Offer Request
Complete and submit an Offer in Compromise Request, form TC-410. You must include a completed TC-805 for individuals and/or TC-803 for businesses. Furthermore, if the offer is being submitted by a third party, a Power of Attorney or form TC-737 must be attached.
An Offer in Compromise Request must cover the total account liability. Additionally, if the Commission accepts your offer, the liability for the period(s) covered by the offer is fully settled (with the exception of future audits). Moreover, the Commission will reject your Offer in Compromise Request if the information is incomplete or you have not provided all the required documentation.
Contact a tax attorney today to discuss whether a USTC Offer in Compromise is right for your situation and whether you qualify.