Application requirements
You may be eligible for a settlement offer with the Oregon Department of Revenue (DOR) if you owe more tax than you can pay.
Not everyone qualifies for a settlement offer. You may want to apply if:
- You do not have an open appeal with DOR.
- You are not in active bankruptcy or in litigation.
- You have filed all required Oregon tax returns for all tax years and all tax types. (When you don't file a tax return, but were required to file, DOR will “assess" your tax—computing the taxes you owe based on information we have. You will need to either accept the DOR assessment or file your own return.)
- Your rights to appeal your tax debt must have expired.
- The estate of a deceased customer cannot be in open probate.
- You are exclusively on a fixed income or receive public assistance, have had a significant reduction in income, or you can show that you do not have enough monthly income or assets to pay your debt in full.
- Your total assets are worth less than what you owe and you can show that you cannot sell assets or borrow against them to pay your tax debt.
- You want to include debt from a closed business for which you have filed all required returns or accepted DOR's estimated return(s). Debt from an open business cannot be included in your application.
Submitting a settlement offer application
- Your application, and required documentation that are listed in the instructions, must be submitted by mail or delivered to a DOR office.
- Review the settlement offer application instructions. Printing these to use while completing the application form is helpful.
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Complete the settlement offer application online and print a hard copy, or print the application and complete it by hand.
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Include a payment equal to 5 percent of the offer (line 88, page 7 of the application form). The payment will be applied to your tax balance.
- Submit your settlement offer materials.
Note: DOR will not consider an offer of $0.00 (zero). Your settlement offer must be an amount that is larger than $0.00.
DOR may need additional information
If DOR staff call you or send you a letter asking for missing or additional information, you must respond in a timely manner. We will explain the deadline or it will be stated on the letter. We will deny your application if we do not receive the requested information by the deadline.
If your settlement offer is accepted
You will receive a letter if your offer is accepted. It will specify the terms of the offer, including:
- Commitment to make voluntary payment of the settlement offer amount in full within 30 days or you may ask for a monthly payment plan.
- All payments, refunds, or credits received by DOR before your settlement offer is approved will be applied to your existing debt and not to your settlement offer amount.
- Forfeiture of your right to appeal included tax debt [ORS 305.280 (3)].
- Completing the 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 DOR, to pay a new tax debt in full.
- Release of any tax lien(s) on your property only after full payment of the settlement offer amount and completion of the compliance period.
If you fail to comply with the terms of the settlement offer agreement, DOR will consider you to be default of this agreement and we can continue collection efforts on the full amount you owe.
If your settlement offer is denied
You will receive a letter stating that your offer was denied and explaining the reasons. This decision cannot be appealed.
We will apply the required 5 percent payment to your current debt.
You may submit a new settlement offer application, with a new 5 percent payment, at any time.
Frequently asked questions
This payment is calculated based on the assets and expenses you report on your application. The 5 percent payment amount will be on page 7, section 6, line 88 of the settlement offer application.
It will be applied to the balance you owe whether your application is
approved or denied.
The amount that is appropriate for each customer is determined by your financial situation and the resulting calculation. The amount is located on page 7, section 6, line 88 of the settlement offer application.
Liens are released after completion of the three-year settlement offer compliance period. This period begins after you have paid your settlement offer amount in full.
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 DOR to consider. You will have to include a 5 percent nonrefundable payment with each new application.
In general, all debts an individual owes to DOR may be included in a settlement offer. However, debt owed by an individual for an open business or and debts owed to another state agency for which the DOR Other Agency Accounts (OAA) program is collecting cannot be included.
Note: Business entities are not eligible for the settlement offer process.