Settle Tax Liabilities with the Help of the California Tax Agency

Owing tax debt in California or anywhere in the States is stressful as you might lose your property or even face Justice Department in extreme cases. Luckily, the State’s IRS willingly agrees to come to reasonable terms with taxpayers where they can pay off their debts.

In rare cases, tax experts from the California Tax agency may negotiate with the State taxation board and agree to Installment or offer a Compromise, where you can pay a lesser amount and get relief.

Managing Tax Debts

Taxpayers are awarded multiple options in which they can manage to pay debts. Tax liabilities are a huge bother in California, and you may not want to face judicial obligations. Thus, it is always better to hire a team of tax experts (whom include former IRS auditors, counsellors and IRS tax settlement attorney). They are knowledgeable and experienced in communicating and settling liabilities with the State tax board.

If you owe money or have unfiled tax liabilities, an IRS tax settlement attorney may handle all your problems before facing a jurisdiction.

Here are a few options in which you can manage tax liabilities;

Offer in Compromise

In California, an Offer in Compromise is a negotiation between the taxpayer and the State tax board or IRS. Under this option, the IRS may eliminate a portion of the debt the debtor owes.

This option is chosen wherein the debtor is not accomplished with sufficient finances to pay off the debt but enough income to make smaller instalments.

The IRS considers several factors to determine whether the taxpayer is eligible for an Offer in Compromise;

  • taxpayer’s monthly income
  • monthly expenses on the debtor and their ability to manage
  • Taxpayer’s assets
  • Current Income
  • Whether the taxpayer is involved in any bankruptcy proceedings

When the taxpayer’s application is accepted, they may choose the mode of payment. They might either pay in a lump sum or a fixed monthly instalment.

Instalment Agreement

The California state franchise tax board permits Installment payment if you cannot pay tax debts in full. Although the instalment feature includes interest and penalties until paid in full, it is a relaxation for taxpayers.

  • A taxpayer is eligible for an Installment Agreement only if the tax debt is not higher than $25,000. The tax owed must be paid in fixed instalments within five years.
  • The taxpayer is eligible for Installment only when he has filled all the tax returns without fail.
  • The taxpayer is paying current taxes under Offer in Compromise or Installment Agreement.
  • The taxpayer is not facing an Order to Withhold, Continuous Order to Withhold, or to earn a Withholding order.

An instalment agreement can be requested in three different ways;

  1. online application
  2. Application over Phone IVR system
  3. Application through mail on California State tax Board registered email id

Additionally, you are eligible for the Fresh Start Plan if you have just started a business and failed to pay tax in the initial years.

If you are facing issues with tax payment or need assistance with tax negotiation, you can consult a tax attorney from California.


If you are in California and struggling with tax payments, you may choose various settlement programs to pay taxes in instalments. Check out the post to know how to settle tax liabilities with the help of tax experts.


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