Some taxpayers who come to us seeking an IRS tax settlement also owe state income taxes. Each state has its own rules and regulations to resolve back taxes.  For those taxpayers who have Georgia tax problems, you should know that Georgia has an Offer-in-Compromise (‘OIC”) Program that allows you to reach a tax settlement for an amount less than what you owe. The Georgia Department of Revenue (“DOR”) will typically consider your offer if it represents the most they can expect to collect within a reasonable period of time.

While each offer is evaluated on its own facts and circumstances, the DOR gives significant consideration to the following factors:

  • Your ability to pay
  • The amount of equity in your assets
  • Your present and future income and expenses
  • The potential for your circumstances to change
  • If the offer is in the best interest of the state

Different Types of Offers in Compromise

The DOR will accept offer in compromise applications for the following reasons:

  • Doubt as to Collectability-This means it is doubtful that the taxpayer could ever fully pay the amount owed considering the equity in their assets and their income and allowable living expenses.
  • Doubt as to Liability-This requires a legitimate doubt that the taxpayer owes part or all of the outstanding tax.
  • Economic Hardship-Although there is no doubt the taxpayer owes the tax and the DOR may be able to collect the full amount, there exists exceptional circumstances that would allow the DOR to consider an offer in compromise.

A collection information statement is required to be submitted when requesting a doubt of collectability offer or economic hardship offer. You must have filed all required tax returns and made any required estimated tax payments for your offer to be considered.

An Offer in Compromise can be an effective tool to help you reach a tax settlement with the Georgia DOR. Call us today at 866-550-7655 to learn if you are a candidate to resolve your Georgia Income Tax Problems with an Offer in Compromise.