Today TaxMama hears from Tom in MO, who wants to know. “Is there a good procedural manual out there to make it thru the California Franchise Tax Board’s (FTB) Offer in Compromise routine? They are requesting $13K in back taxes, which isn’t doable since I no longer live in CA. I live in MO. I don’t have a “corporate America job” anymore. I’m hourly & this tourist town is only “Open” about 8-9 months a year. Then everyone goes on unemployment for the winter. I currently make enough to “survive”. There isn’t anything extra for the FTB. Help!”
Dear Tom,
Typically, you would fill out the forms in California’s Offer in Compromise Publication 4905 – https://www.ftb.ca.gov/forms/misc/4905pit.PDF .
Be SURE to attach all the documents they request if you’re sending it in.
As you’re filling it in, you can see, all by yourself, how you and your finances will look to an objective stranger.
Looking at the information, using the allowable expenses, does it appear that you are earning enough money to make payments? If you are, FTB will ask for those payments.
On the other hand, If you clearly show, on paper, that you don’t have enough earnings
to even cover your present living expenses (and your list of debt will support this), FTB is apt to grant you some relief.
But remember, every time you fill out one of these applications, you are providing the state with enough information to locate and attach your bank accounts – or other assets. So think carefully before sending it in.
Personally? What would I do in that fix? I’d call the phone number on the notices and be very, very nice. Ask them if they think you would qualify for any level of offer (reduced payoff) – based on your current income level. Don’t file the application if the folks on the phone don’t think you’d qualify. You’d just be giving them access to all your assets on a silver platter.
Being out of state won’t protect you. California has long arms. But they take a lot longer to reach you. And remember our Governor’s motto – I’ll be beck!…in your pocket.
And remember, you can find answers to questions about former state taxes and all kinds of other tax issues, free. Where? Where else? At TaxMama.com
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- California’s Publication 4905 :: Offer in Compromise
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