Offer in Compromise with the Ohio Department of Taxation

Offer in Compromise with the Ohio Department of Taxation

This article explains how Ohio taxpayers can settle their tax debts what is called an “Offer in Compromise” with the Ohio Department of Taxation. The Offer in Compromise with the Ohio Department of Taxation is a great way to settle your tax debts at benefit to you. If you need help settling a tax debt in Ohio, contact us at The McGuire Law Firm for assistance. 

What is an Offer in Compromise?

An offer in compromise is an agreement or arrangement that allows a debtor to pay less than the total amount of the debt to settle and resolve the total amount of the debt. In the context of a tax debt with the Ohio Department of Taxation, a person would propose a lesser amount to pay the Ohio Department of Taxation to settle their entire tax liability in full.

Can a Taxpayer in Columbus, Ohio or Elsewhere in Ohio Settle Their State of Ohio Tax Debts?

The good news is, yes! The state of Ohio does have a formal offer in compromise. The offer in compromise can resolve multiple debts or liabilities with the state of Ohio, including tax debts with the Ohio Department of Taxation. The Ohio Attorney General allows for the settlement of these claims through a formal process. This can be very beneficial to taxpayers in Ohio as not all states do allow a taxpayer to settle their taxpayer with the applicable state taxing authority.

What Are Some of the Contingencies or Elements that Allow a Taxpayer to Qualify for an Offer in Compromise With the State of Ohio?

Generally, for a taxpayer to qualify for an offer in compromise with the state of Ohio, the taxpayer must show an economic hardship to the taxpayer such as the taxpayer’s income would not allow the taxpayer to pay for the day-to-day living necessities if the tax debt were being paid back. The taxpayer can also show that given their financial circumstances there is a doubt as to whether or not the state of Ohio (or specifically for a tax debt) the Ohio Department of Taxation is unlikely to collect the tax debt from the taxpayer given the taxpayer’s assets, income and other circumstances. For example, an innocent spouse to a tax debtor may qualify for an offer in compromise. 

What if I Have Multiple Debts to the State of Ohio, Can I Resolve All of Them with an Offer in Compromise?

Yes, you can resolve multiple debts with the state of Ohio with an offer in compromise. The objective of the offer in compromise program is to allow a taxpayer, whether an individual or business taxpayer to resolve all of their outstanding debts with the state of Ohio.

If I Have Filed Bankruptcy and am Still in the Bankruptcy Process Can I Submit an Offer in Compromise to the state of Ohio?

Because the filing of bankruptcy may discharge or resolve certain debts with the state of Ohio, you generally should not file an offer in compromise with the state of Ohio during the bankruptcy process. Once you have completed the bankruptcy process, if you still owe certain liabilities to the state of Ohio, you can then file an offer in compromise. 

If I am Making Payments to the Ohio Attorney General Under a Payment Agreement Should I Continue to Make the Monthly Payments Even if I Have Submitted an Offer in Compromise?

Generally, yes, if you are still financially able to make the payments pursuant to the payment agreement you have established. To officially end the payment obligations under your payment agreement you should have formally agreed upon an offer with the state of Ohio.

Do I Receive a Formal Acceptance of Rejection of My Offer in Compromise?

Yes. Whether your offer in compromise is accepted or rejected by the Ohio Attorney General, you will receive formal notice of the acceptance or rejection.

If My Offer in Compromise is Rejected Can I Appeal the Rejection?

Unfortunately, no. The acceptance or rejection of your offer in compromise from the Ohio Attorney General is final and you do not have rights to appeal a rejection.

If My Offer in Compromise is Accepted, How Long Do I Have to Pay the Offer Amount?

The offer amount must be paid within 60 (sixty) days of the offer being accepted. A taxpayer may be allowed to pay the offer via a payment agreement by contacting the Ohio Attorney General.

Can My Specific Tax Liabilities Be Resolved With an Offer in Compromise?

Whether or not your specific tax liabilities (or other liabilities) with the state of Ohio can be resolved with an offer in compromise will be dictated by your specific financial circumstances and other facts and circumstances. The state of Ohio will consider all your financial issues such as equity in assets, current income, current debt and all obligations when determining whether or not to accept your offer. You can speak with a tax attorney to determine if you have a valid chance of having an offer in compromise accepted.

Contact The McGuire Law Firm to speak with a Columbus tax attorney about your tax issues and resolution options. You may be able to resolve your tax debts with an offer in compromise, and a tax attorney can assist you with the process.