This is the eighth post in the Collection Options series. This series is dedicated to presenting individuals and businesses with options for dealing with outstanding tax obligations.
Offer in Compromise – Minnesota Department of Revenue. The starting point for an Offer to the Minnesota Department of Revenue is similar to the IRS. Determine the net quick sale value of the assets and the taxpayer's excess monthly income. The Department will evaluate this information in light of the additional factors listed below. Some of these factors are also used by the IRS, but the Department is often more subjective in its evaluation, considering the taxpayer's past bad conduct and evaluating the taxpayer's payment ability over a longer period of time.
1. Age of the liability and whether the statute of limitations on collections will soon expire;
2. Employment potential of the taxpayer;
3. Age and health of the taxpayer;
4. Realistic potential for collecting the liability in full;
5. Other liable parties (spouse, partner, corporate officers);
6. Credit bureau report;
7. The make-up of the balance due (in other words, tax penalty, and interest);
8. Whether the liability is comprised of “trust taxes” (such as Minnesota income tax withheld by an employer or sales tax collected by a retailer);
9. Whether the taxpayer is current with filing all tax returns;
10. Previous collection action taken, past or current bankruptcy of the taxpayer, and the amount paid against the liability to date including any refunds that may have been applied;
11. Whether any doubt exists to the correctness of the liability;
12. Whether all or a portion of the liability would be discharged if the taxpayer declared bankruptcy;
13. In the case of a business liability, whether the business is open or closed;
14. Whether the Offer is the first Offer to compromise or a reconsideration of a previous Offer; and
15. Whether there are factors that would justify an abatement of penalty.
If the Offer is accepted, the taxpayer will receive an Agreement to Compromise setting out the terms and conditions of the Offer. If the Offer is denied, the taxpayer may request a reconsideration of the denial by the Minnesota Department of Revenue Taxpayer Rights Advocate's office. However, if the Offer is not accepted by the Minnesota Department of Revenue or the Attorney General, there are no formal appeal rights. For more information about Compromise Offers with the Minnesota Department of Revenue, see the Department's Collection Manual, Pages 30 through 32,