Can I get an Offer in Compromise with My State?
Do States have Offer in Compromise?
What about the submitting an Offer in Compromise with my State? We get this question a lot. In some circumstances a State Offer in Compromise may be easier to get approved once the IRS has approved your offer.
For years, most States did not even have an Offer in Compromise program and even when they did, it was usually suggested by a State Revenue Agent as the option of last resort. The normal processing time for a federal OIC in 12 to 15 months, but States usually take 2 to 4 months. Typically, the best way to submit State OIC is after you have successfully completed your IRS OIC. States feel that the IRS has already done most of their due diligence and are more receptive when an offer is submitted to the state.
Not all States follow the same process or make their decisions the same way. Go to your States Department of Revenue web site to find out more about their Offer in Compromise program.
The following states still do not offer an OIC program or have restrictions.
Alabama
Alaska
California – Offers one, but typically not accepted unless in BK
Delaware – Only if you are in BK
Mississippi
Montana
Nebraska – State must initiate, taxpayer cannot.
New Mexico
North Dakota
South Carolina
South Dakota
Texas
Vermont
Wyoming