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Department of Finance: Division of Revenue

OFFER IN COMPROMISE

Submitting An Offer In Compromise -

In some accounts, the amount of accruing penalties and interest is so large that the monthly payments may never pay off the tax. An Offer in Compromise may be a practical way for you to resolve your outstanding tax bill. Under certain conditions the DE DOR will settle unpaid accounts for less than the full amount of the balance due. This applies to all tax types arising under the DE DOR administration.

How To File An Offer In Compromise

An Offer in Compromise must be made in writing, addressed to the attention of your account assignee, Delaware Division of Revenue, 820 N. French Street, Wilmington, Delaware 19801, requesting a reduction in the penalty and interest on your account.

A collection information statement must be completed and returned. This can be mailed to you or obtained from The Delaware Division of Revenue web site.

All past tax returns must be filed with DE DOR before an Offer would be considered.

The tax portion of the liability must be paid before and Offer would be considered

Grounds For Filing An Offer In Compromise - You can submit a letter for an Offer in Compromise if it is made on one or both of the following grounds:

(1) Doubt as to the liability for the amount owed;
                         or
(2) Doubt as to your ability to fully pay the amount owed. (If this is due to health reasons, documentation from your physician should also be submitted.)

Upon receipt of your letter, your account is forwarded for calculation of a compromise amount. Please allow 2 to 3 months. If you have previously compromised with the Internal Revenue Service, include a copy of that compromise acceptance and documentation of the total due to the IRS before the compromise. This will make a difference in the method used to calculate the amount of the compromise.

Due to the fact that compromises are given under the assumption that the debt can not be paid in full, if you live in the State of Delaware, or a State that Delaware has an agreement with to intercept refunds, compromises are not calculated January 1 through April 30th. If your refund will pay the balance due, then it is assumed you have the ability to pay. Once you file your current year return and provide a copy of your current year federal return, a compromise will be considered.

Agreement of an Offer In Compromise

Upon receipt of the offer in compromise agreement, you are required to sign and return the agreement to make the compromise valid. When signing this agreement, you agree to file, timely, and pay all future tax returns for the next 5 years.

If you do not file your taxes timely, any amount abated from your account due to the compromise will be added back and collected in full. If a tax lien had been satisfied, it will be stricken in the court and remain valid on your credit record until the amount is paid in full.

If you file timely but are not able to pay the balance in full, you must enter in to a payment plan to keep your compromise valid. Any default in the payment plan may make your compromise null and void. No compromise will be given on any future tax liabilities.

Note: Submission of an Offer in Compromise does not automatically stop collection action on your account. If there is any indication that you filed the offer simply to delay collection of the tax or that the delay would interfere with collecting tax, we will immediately continue our collection efforts.


What Happens When You Take No Action To Pay

Last Updated: Friday, 25-Jan-2013 14:04:52 EST
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