Georgia Department of Revenue: Offer in Compromise

Are you unable to pay your outstanding taxes in full in Georgia? If yes, we have some good news for you. 

The Georgia Department of Revenue (GADOR) offers a potential lifeline through its Offer in Compromise (OIC) program. This program allows taxpayers who cannot pay their taxes to settle their tax debts for a reduced amount.  

The settlement includes the tax owed, penalties, and interest. The Internal Revenue Service (IRS) has a similar program for unpaid federal taxes. And yes, you can apply to and benefit from both programs.

So, how does the program work? How do you apply? What are the eligibility criteria? This post explores everything you need to know about Georgia’s Offer in Compromise.

What is Georgia’s Offer in Compromise?

An offer in compromise is an agreement between a taxpayer and the state or federal government that settles a tax liability for payment of less than the full amount owed. For instance, Georgia’s Offer in Compromise allows you to settle a tax liability for less than the total amount owed.

The Georgia Department of Revenue offers an OIC to achieve a collection of what is potentially collectible at the earliest possible time and the least cost to the government. However, its success largely depends on the taxpayer’s compromise proposals and their ability to pay.

Georgia OIC Eligibility

Generally, the Georgia Department of Revenue accepts an OIC when it’s unlikely that the tax liability can be settled in full and the amount offered reasonably reflects collection potential.

However, you must meet certain requirements to submit an offer in Compromise in Georgia. For instance, you must have all required tax returns and reports filed. Additionally, you should not be actively in Bankruptcy.

Also, the state may reject an OIC if you owe sales taxes or payroll taxes to the state.

Additionally, the Georgia Department of Revenue will also consider the following factors to determine how much your offer should be:

• Your ability to pay
• Present and future income
• Your assets and equity
• Present and future expenses
• Potential for changes in circumstances
• The interest of the state

Types of Offers in Compromise

You can qualify for an OIC in Georgia in three different ways;

Doubt as to collectability

Doubt as to collectability means there’s doubt that you could ever pay the full amount of tax liability owed. Georgia’s revenue department considers this Offer in Compromise only if you (the taxpayer) cannot pay the taxes in full, either through the current installment agreement guidelines or by liquidating assets.

When applying for doubt as to collectability OIC, you must submit the appropriate collection information statement together with all the required supporting documents.

Economic hardship

This applies when you owe delinquent tax debt and could pay the debt in full, but if the department were to collect the taxes owed, it could create a significant economic hardship for you. There should be an exceptional circumstance that should make the department consider an offer in compromise.

Doubt as to liability

You may get an OIC based on doubts as to liability if there’s a legitimate doubt that you should owe part or all of the assessed tax liability.

How to Apply for an Offer in Compromise in Georgia

If you meet the eligibility criteria for Georgia’s OIC and wish to apply, you can do so in two ways: online or by mail.

Online applications are completed via your Georgia Tax Center account.

If submitting your application by mail, you should download and complete an Offer in Compromise application. Once complete, mail the application and all relevant attachments to:

Georgia Department of Revenue

Offer in Compromise Program

1800 Century Blvd., NE, Suite 9100

Atlanta, Georgia 30345

If you need any assistance in completing this complication, contact the Department at (404) 417-6543

Note: The processing time for an OIC is up to 180 days from the receipt of the application. There’s also a processing fee of $100, which is nonrefundable. However, the fee may be waived if you qualify as low-income.

Is Your Offer Accepted or Declined?

Once you’ve submitted your OIC to the Department of Revenue in Georgia, you should expect two outcomes: Acceptance or denial.

If the department accepts your offer, you’ll receive a notification by mail. You should, then, make payment of the accepted offer by the due date or as indicated on the acceptance letter.

If your offer is declined, you’ll still be notified by mail. Your OIC may be rejected due to the following reasons:

• Insufficient documentation
• Omitted items such as assets and income from your financial statement
• History of non-compliance
• Your property valuation is greater than shown on your financial statement
• Your debt is based on taxes collected from others, such as employee withholding taxes but not remitted

If declined, contact the department immediately to arrange payment of the entire tax liability.

Need Help From an Experienced Tax Professional?

There are a lot of complexities surrounding Offers in Compromise. Moreover, approval rates are usually minimal. Therefore, it’s important to consult with an experienced and trusted GA tax attorney like Cumberland Law Group.

We will help you determine your eligibility for Georgia OIC and your chances of approval. If you’re eligible, we will help you submit your offer. If you don’t qualify, we will help you explore other options to minimize your tax burden.

Need help with your tax problems? Call us at (800) 960-5359 or schedule a consultation today.