Sam Brotman, JD, LLM, MBA August 24, 2014 4 min read

Employment Development Department Offer in Compromise Part Two

To fill out the form applicant will need social security number and EDD number. Applicant will need to provide reasonable offer and explain why offer should be accepted by EDD. Additionally, the form requires full financial disclosure, including information about community property. The application must be accompanied by cash, cashiers check or money order equal to amount offered. If applicant cannot pay the full amount at the time of offer, EDD may permit to pay the agreed amount in installments within no more than five-year period. When applicant submits payment with application, in the event an offer is not accepted, the amount will either be applied to the liability or refunded, at the discretion of the applicant submitting the offer. A determination by the EDD that it would not be in the best interest of the State to accept partial payment in satisfaction of a tax liability will not be subject to administrative appeal or judicial review. A separate application must be submitted for each EDD account to be compromised.

Once applicant-taxpayer satisfies the compromise agreement, EDD will notify him or her, in writing, that the terms of the compromise agreement have been fulfilled and all liens filed or recorded, or both, against the individual’s interests have been released. EDD then will provide the taxpayer with a copy of the statement on file and the statement will be retained bny EDD for one year from the date of the issuance.

Once the terms of the compromise agreement are fulfilled, including payment of the amount offered, the liability will be considered satisfied in full and all tax liens filed or recorded, or both, will be released. Submission of an offer per se does not automatically suspend collection action on a liability. Should there be any indication that applicant filed the offer only for the purpose of delaying collection or that application will negatively impact EDD's ability to collect the tax, collection efforts will continue. If the EDD has previously agreed to an installment plan, those payments must continue. Should collection action occur after an acceptance of an Offer in Compromise by the EDD, applicant may receive a refund or have the funds applied to the agreed amount.

Please note that EDD may review compromise records once a year during annual audit. Also it is important to keep in mind that offer in compromise may be subsequently rescinded (canceled) by the EDD if applicant:

1. Concealed from any officer or employee of the EDD (and of the State in general) any property belonging to the estate of the individual liable with respect to the tax.

2. Received, withheld, destroyed, mutilated, or falsified any books, document, or record.

3. Made any false statement relating to the estate or financial conditions of the individual liable with respect to the employment tax.

4. Failed to pay any tax liability owed the EDD for any subsequent, active business in which the individual who previously submitted the offer in compromise has a controlling interest or association.

The EDD will notify the individual who previously submitted the Offer in Compromise in writing of the rescission of any offer, reasons for rescission, and the amount of liability that is due and payable.

 

 

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Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law

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