However, an offer of compromise is not without its drawbacks. This is a financially invasive process, and acceptance standards are strict. You may need to sell assets and make tax credits and refunds default. There is no guarantee that your offer will be accepted, and even if it does, you will need to be perfect in your tax transactions for the foreseeable future. A missed payment or a late deposit could jeopardize the agreement. A successful mitigation agreement with the Tax Board franchise requires good information and careful preparation. If the FTB believes that the taxpayer has the potential for a future increase in revenues, it may, once the application is approved, require the taxpayer to enter into a “collateral agreement” with the FTB. The agreement has a five-year term and requires the subject to pay FTB a percentage of future revenues when revenues exceed certain thresholds set by FTB and agreed upon by the subject. As a general rule, the FTB does not require a guarantee agreement if the taxpayer has fixed income securities or has only limited potential to increase income. If you are able to meet the financial austerity requirements set by the FTB, it may be possible to settle your tax debt through a monthly payment plan. You must submit all returns due and pay a one-time fee to establish the contract, which will be calculated as part of your liability. FTB may impose a pawn fee when the taxpayer and the FTB have reached a temperate agreement, but there is still a balance to be struck or the history of non-payment by the taxpayer.
The FTB must inform the subject of this possibility when entering into a temperature contract and inform the taxpayer before the deposit of the right to pledge. After the issuance of a pledge, the FTB should have sufficient time to give the insured person or the agency sufficient time to respond before a new action is taken. A subject may, at any time, request a conclusion agreement during the administrative procedure. If the taxpayer is currently in the process of reviewing, protesting or appealing the administrative process, the taxpayer should apply to the FTB professional who is currently cooperating with the subject. If the application is made, the FTB expert will review the application to determine whether a contract of conclusion is the appropriate instrument for the taxpayer`s particular situation and will inform the taxpayer whether a contract of conclusion is an appropriate instrument in the current dispute. Unfortunately, FTB`s collection activities do not stop even when FTB and taxpayers reach an agreement. FTB may continue to collect taxes if the discontinuation of collection operations may result in the loss of FTB`s ability to recover the money owed. Interest is also growing.
The taxpayer only provides the agreed payment amount if ftB requests payment in accordance with the compromise offer. FTB imposes a lump sum payment under this program. FTB may also work in temperature agreements if the subject has the option to make monthly payments in excess of the amount initially offered by the subject and accepted by FTB. With the exception of the above public registration statement, all other comparative information is considered confidential.