Rhode Island Offer in Compromise: What You Need to Know
An Offer in Compromise is an agreement between you and the State Government to settle your back taxes for less than you owe.
An Offer in Compromise is strictly based on numbers; basically, your income versus your expenses and the equity in your assets.
If you can prove to the State you do not have the ability to pay back your taxes in full before the Statute of Limitations expires, then you may be eligible to file an Offer in Compromise. However, it will depend on your Reasonable Collection Potential and how much time is left before Statute of Limitations on the debt expires.
Qualifying for an Offer in Compromise
To qualify for an OIC with the State of Rhode Island, it is much like the IRS and other states.
- You must have filed all required tax returns.
- The tax must have been assessed and final notice of balance due received.
- You cannot have an open bankruptcy case.
Submitting Your Offer in Compromise
Much like the IRS and other states, you must submit all required supporting documents and failure to do so will result in your Offer being rejected. Their list of documents includes:
- File Form RI 656 with the Tax Administrator.
- Within 10 days of Filing RI 656, you must then complete and File Form 433.
- Income – Copies of paystubs, earnings statements, Social Security Administration benefit letters, pension statements, bank statements reflecting direct deposits, etc.
- Expenses – Copies of Utility statements, credit card or loan billings, medical bills, etc.
- Accounts – Copies of all statements for bank, retirement, and investment accounts.
Offer in Compromise Pros and Cons
The Pros of submitting an Offer to the State of Rhode Island is they may allow your debt to be compromised and thereby removed.
The Cons are if the State rejects your Offer, it is not subject to administrative or judicial review. In addition, you only have 30 days to make your Offer payment if accepted by the State. So, before submitting, we suggest ensuring you have the funds ready when filing.