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Our recent 'offer in compromise' to BOE (in CA) has been denied. Can we appeal? Would (personal) bankruptcy resolve lien?

Los Angeles, CA |

We recently submitted an 'offer in compromise' to California Board of Equalization for the corporation that failed several years ago, and is now our personal responsibility to pay back, but we have only $300/mo. income (basic living is supported by my grown up child but not sure for how much longer he'll be able to support us) and living on food stamp and healthy way LA as our health condition is not so great either.
So we were really hoping that our OIC would be accepted but since it's denied and they're asking us to pay in full, we really can't and want to know if we can appeal.
If not, then we heard it'll go to collection, but we have no assets (just 2 old cars that we're using. We'll be fililng for a personal bankruptcy soon..would that resolve this collectio/debt/lien?
Please advise..

Attorney Answers 2

  1. Bankuptcy is a possible option. You need to consult with a bankruptcy practitioner to determine if you qualify for bankruptcy, and provide the attorney with the relevant documents of your tax liablity as well as your other debts. You may not be able to discharge your tax debt if you have a lot of credit card debt.

    There is an appeal process with the BOE. You may not have offered enough because of your limited resources which is why your Offer was denied. This means your appeal would also be denied. See BOE Publication 17 for the appeal procedure.

    Good luck!
    Phillip M. Smith Jr.
    Los Angeles Tax & Business Attorney
    Call: 323-292-4116 or 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

  2. Don't forget that there are state exemptions that operate as a threshold as well. In some cases, depending upon how much of other assets you have and what the source of your income is; what if you are living below the exemption level? What if you are judgement proof?

    BOE may not think so, but has a collectibility analysis been computed?

    BOE is a hard case for sure.

    Have the analysis done by a bankruptcy attorney who knows tax.

    Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.

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