Settlement offer stipulations
You may be eligible for a settlement offer if you owe more tax than you can pay.
Not everyone qualifies for a settlement offer. You may want to apply if:
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You are exclusively on a fixed income or receive public assistance.
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Your total assets are worth less than what you owe.
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You have had a significant reduction in income.
Other qualifying conditions
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Your appeal rights for your tax debt must have expired.
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You must have filed all required Oregon tax returns for all tax years and all tax types.
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You must show that you can't sell assets or borrow against them to pay your tax debt.
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You must show that you don't have enough monthly income or assets to pay your debt in full.
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You can't be in active bankruptcy or in litigation.
How to submit a settlement offer application
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Complete a fillable Settlement Offer Application online or complete the paper version which is available to print online.
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Gather supporting documents listed in the form and include them with your application.
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Include a payment equal to 5 percent of the offer. The payment applies to your tax balance.
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Submit your settlement offer application to:
Oregon Department of Revenue, PO Box 14725, Salem OR 97309-5018
Note: The department will not consider an offer of $0.00. Your settlement offer must be an amount which is larger than $0.00.
If your settlement offer is accepted
You will receive a letter indicating your offer was accepted outlining the offer terms including:
- Voluntary payment of the settlement offer amount in full within 30 days or you may ask for a 12-month payment plan.
- All payments, refunds, or credits received by the department prior to the approval of your settlement offer being applied to your debt and not to your settlement offer amount.
- Your forfeiture of your right to appeal [ORS 305.280 (3)].
- The completion of a three-year compliance period by filing and paying all taxes due for three years from the date you pay your settlement offer amount in full. You will have 90 days, from the day you receive the notice from the department, to pay a new tax debt in full.
- Authorization for the department to contact third parties (IRS, Oregon Employment Department, credit reporting firms, etc.) to verify the information you provided in your settlement offer application.
- The release of any tax lien on your property after full payment of the settlement offer amount and completion of the three-year tax compliance period.
Failure to comply with the terms of the settlement offer agreement will be considered defaulting on the agreement leading to collection of the full amount.
Frequently asked questions
The 5 percent payment is a calculated amount. You can locate the 5 percent payment amount on page 13, section 6, line 88 of the settlement offer application.
It is applied to your balance owing.
It is applied to your balance owing.
It is applied to your balance owing.
This is an amount determined by the calculation. The amount is located on page 13, section 6, line 87 of the settlement offer application.
The department will not accept less than the amount shown on line 87 of the settlement offer application. If the amount on line 87 is greater than the amount that you owe this indicates that, based on the calculation, you can pay your debt in full.
Liens are released after completion of the three-year settlement offer compliance period. This compliance period begins after you have paid your settlement offer amount in full.
Liens are released after completion of the three-year settlement offer compliance period. This compliance period begins after you have paid your settlement offer amount in full.
You will receive written correspondence from the department once a decision has been made.
Settlement offer applications are processed in the order they are received.
We usually make a decision within 30 days if your application is complete and
we have received all required documents.
A settlement offer denial cannot be appealed. However, you may resubmit an application with additional information such as changes to your income, expenses, or financial situation that you would like the department to consider. You will have to include a 5 percent nonrefundable payment with each new application.
In general, all debts owed by an individual to the Department of Revenue may be included in a settlement offer, with some exceptions. Exceptions include, debt owed by an individual for an open business and debts owed to another state agency for which the department’s Other Agency Accounts program is collecting.
Note: Business entities are not eligible for the settlement offer process.