OAR 150-305-0090
Settlement Offer
(1)
As used in this rule:(a)
“Settlement offer” means an offer made by a taxpayer or an authorized representative to satisfy a self-assessed tax liability or tax liability on which appeal rights have expired.(b)
“Completed settlement offer” means a settlement offer that has been accepted by the department and for which final payment of the offered amount has been made.(c)
“Tax liability” means one or more tax years and programs.(2)
A settlement offer must be made in good faith. Fraud or misrepresentation on the part of the taxpayer or authorized representative may invalidate a settlement offer or a completed settlement offer.(3)
Prior to making a settlement offer, a taxpayer must be in compliance with filing requirements for all tax years and tax programs administered by the department. A taxpayer is “in compliance” when all required returns or reports have been filed, whether or not timely, or when, in the absence of a return, an assessment issued by the department under ORS 305.265 (Deficiency notice)(10) is considered correct and final by the taxpayer and the department.(4)
For settlement offers submitted on or after October 1, 2001, a taxpayer will only be allowed one completed settlement offer for which the 3-year future compliance requirement under subsection 10 has been satisfied.(5)
The settlement offer must be accompanied by a cashier’s check or bankable funds in an amount equal to 5 percent of the total offer. This 5 percent payment will be deposited to the credit of the taxpayer’s liability as part of the offer. This payment will not be refunded, even if the offer is not accepted. The taxpayer or authorized representative may withdraw their offer prior to the department’s acceptance or rejection of the offer. The 5 percent payment will be refunded in such cases.(6)
The offer must be made by completing the “Application for Settlement Offer” form provided by the department. This form includes a calculation of an acceptable settlement offer, based upon a standard formula determined by the department.(7)
A settlement offer will be reviewed by the department and accepted or rejected based on the department’s evaluation of the taxpayer’s ability to pay and the anticipated costs of further collection work. Examples of facts and circumstances that may indicate the lack of an “ability to pay” include but are not limited to:(a)
The taxpayer’s sources of income or assets are negligible in comparison to the outstanding liability.(b)
The taxpayer owns assets that, in total, are worth less than the settlement offer.(c)
The taxpayer demonstrates an inability to pay the account within two years.(d)
The taxpayer qualifies under “hardship” guidelines based on the financial statement.(e)
The taxpayer verifies an inability to borrow sufficient funds to pay the liability in full. Verification may be made by providing denial letters from lenders, providing a work history and by credit references.(f)
The taxpayer has little or no equity in personal assets, such as stocks, bonds or dividends; retirement funds; automobiles, truck, trailers or other vehicles; or equipment.(g)
The taxpayer has little or no equity in real property, such as a personal residence, farm, houseboat or bare land.(8)
A settlement offer will be deemed accepted when the department sends its written notification to the taxpayer or authorized representative. In the event an offer is rejected, the taxpayer or authorized representative will be promptly notified in writing.(9)
If the settlement offer is accepted, the taxpayer must pay the balance of the offered amount within 10 days of the date of the letter notifying the taxpayer of the acceptance. An election can be made to pay the balance in no more than six equal monthly installments. Payment must be in bankable funds.(10)
The terms of the settlement offer include but are not limited to:(a)
The taxpayer agrees to waive any appeal of the assessment of the tax liabilities that are the subject of the settlement offer under the provisions of ORS 305.280 (Time for filing appeals)(3); and(b)
There is a 3-year future compliance period during which the taxpayer must file all tax returns that are due and must pay all amounts that have been assessed. The taxpayer must pay the amounts that have been assessed within 90 days of the date of the assessment unless paragraph (c) of this subsection applies. This compliance requirement includes all tax programs administered by the Oregon Department of Revenue. This 3-year compliance period begins when the taxpayer makes final payment of the amount offered.(c)
The taxpayer is not required to pay all amounts due within 90 days of the date they are assessed if the taxpayer files an appeal within 90 days of the assessment date. A taxpayer who files an appeal within 90 days of the assessment date must pay all amounts that are determined to be due within 90 days after the taxpayer’s appeal rights have been exhausted or have expired and the liability has become final.(d)
An amount determined to be due under paragraph (c) of this subsection must be paid within 90 days after it has become final even if the appeal is finally resolved after the 3-year compliance period has expired.(11)
In the event that any of the requirements set forth in subsection (10) are violated, collection action may be reinstated on the full amount of the liabilities that were the subject of the settlement offer. See OAR 150-305-0190 (Compromise of a Disputed Liability) for settlement of disputed tax liabilities.
Source:
Rule 150-305-0090 — Settlement Offer, https://secure.sos.state.or.us/oard/view.action?ruleNumber=150-305-0090.