Offers in Compromise
The Offer in Compromise Program administered by the Arkansas Revenue Division of the Department of Finance and Administration (DFA) allows financially distressed taxpayers, who qualify, the opportunity to resolve overwhelming tax liabilities by paying a reasonable amount in compromise. The taxpayer must meet certain criteria under the law (see 2000-4 DFA Rule) and must submit an application, along with the required documentation, on specific forms accessible below. The Offer in Compromise will be returned to the taxpayer if it is incomplete and does not contain the supporting documentation requested. The Form 2000-4 Checklist lists the documentation a taxpayer must submit for an Offer in Compromise.
Typically, an Offer in Compromise is proposed by a taxpayer who is unable to pay an established tax liability because of insolvency. An established liability refers to tax liabilities for which further administrative or judicial review is not available. Please refer to 2000-4 DFA Rule which defines insolvency as a financial condition where the individual's or business taxpayer's expenses exceed income or their liabilities exceed their assets. All required tax returns or reports must be filed; however, if a taxpayer has no filing requirement, this must be noted on the application or checklist.
The Revenue Division will not automatically accept every Offer in Compromise. Each case is evaluated based on its own unique set of facts and circumstances.
For assistance in filing the Offer in Compromise, please contact Problem Resolution and Tax Information Office at 501- 682-7751 from 8:00 a.m. to 4:30 p.m. (Central time), Monday through Friday.
If a taxpayer is not insolvent (as defined above) but does not have the financial resources to pay the tax liability in full at the present time, the taxpayer may request a payment plan agreement, which allows payment of the tax liability (including the penalty and interest) over a period of time. Granting of a payment plan is not automatic. Each request for a payment plan will be considered on a case by case basis and will include a review of the all facts surrounding the liability. Additional interest is computed on the outstanding liability during the installment period. A Certificate of Indebtedness ("lien") will be filed by DFA as required by law. If a taxpayer defaults on any of the terms, the payment plan agreement will be declared to be in default, and other collection measures will be attempted to collect the debt.
Please contact 501-682-5000 or 1-800-292-9829 to inquire about qualifications for a payment plan agreement.
|2000-4 DFA Rule||11/17/2009|
|Form 2000-4 Offers in Compromise (OIC) Application Instructions and Checklist||01/16/2020|
|Form 433A for Individuals (Federal)|
|Form 433F for Individuals (Federal)|
|Form 433B for Businesses (Federal)|
|Power of Attorney|