The approval process is worth the effort. The BOE OIC Unit will deal with you professionally and if you complete the application completely with honest responses, your offer will probably be accepted. If you are paying the BOE $100 per month and thus can afford $1,200 per year, the BOE will want your offer to be whatever $8,400 is worth today. It is a time value of money equation. Payment of $5,000 today may be the equivalent of receiving $100 a month for 7 years. So, your offer should be around $5,000. If the offer is not high enough, the BOE will only ask for more. In that event, you must argue based on your financial records that you are unable to pay that amount. If you are able to point the BOE to the fact that there number is impossible to pay, the BOE will probably accept your OIC. It is that simple. A tax professional that specializes in BOE controversy matters can be extremely helpful in guiding you through the process; but you may also be able to do it on your own if you are able to carefully evaluate your financial situation and you are organized. I have done many OICs in my life and heartily recommend the process to anyone who is unable to pay the full amount owed. The whole process should take no more than 4-6 months.
This "bottom line" question cannot answered be on Avvo. You need to have a professional tax person review the forms that you intend to file. In addition, you have not indicated how much you owe to the BOE which also affects the amount of the Offer. Ultimately, the BOE can file liens and wait until your income increase Tjhe BOE also has a Settlement Program in addtion to its OIC program. if you offer is too low. Seek professional help.
Phillip M. Smith Jr.
Los Angeles Tax & Business Attorney
Licensed in the United States Tax Court
Main: 323-292-4116 ❘ Cell: 562-505-1004
THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mr. Smith is licensed to practice law throughout the state of California with offices in Los Angeles County. He is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. His phone number is 323-292-4116 or his email address is firstname.lastname@example.org.
In my experience, it is more difficult to settle a debt with the Board of Equalization. The IRS considers your Reasonable Collection Potential based on assets, income, and some expenses. The BOE also considers your potential for future earnings, and there's no clear standard for how they make a determination (as far as I know). Consider working with a tax professional to ensure the best possible outcome.
Robert Hoffman is a tax attorney licensed in California. The information presented here is general in nature and is not intended as a substitute for legal advice. This posting does not create any attorney-client relationship with the author. For competent advice about your particular situation, consult your own attorney.