SALT Report 2169 – The Hawaii State Legislature submitted a Bill for final approval that will require all offers in compromise submitted to the Department of Taxation be accompanied by a minimum payment of 20% of the amount of the offer in a lump-sum case, or the first payment in the case of a periodic payment case.
If a taxpayer’s offer in compromise is rejected, any payments received by the Department would be applied to the taxpayer’s assessed liabilities. Additionally, failure to make subsequent payments after the ﬁrst payment under an offer in compromise agreement will be treated as a withdrawal of the offer in compromise.
The bill deﬁnes “lump-sum offer in compromise” as any offer of payments made in ﬁve or fewer installments and “periodic payment offer in compromise” as any offer of payments made in six or more installments.
House Bill 425 passed its third reading and will be effective upon its final approval.
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