The Department will consider settling if one or more of the following criteria are met:
- The issue is nonrecurring.
- There is conflict between a statute, rule, or written instructions to the taxpayer.
- A strict application of the law would have harsh consequences.
- There is uncertainty to the outcome of the decision if it were presented in a court of law.
Disputes not eligible
The Department will not consider settlement if:
- The same issue is being litigated by the Department.
- You present issues where relief cannot be given (such as to reduce the cost and inconvenience of litigation).
- You argue that a statute is unconstitutional.
Unable to pay
The Department will not consider settlements where the only reason is your inability to pay. In such cases, you should contact the Department's Compliance Division about a payment plan or other resolution based on financial hardship. Contact the local office nearest your business.
How to propose a settlement
You may submit a written settlement offer to the Administrative Review and Hearings Division (ARHD). You may use the form or create your own with the necessary information including:
- The amount in dispute
- Why your case should be settled
- The amount you are offering in settlement
- Why the amount you are offering is reasonable (A reasonable compromise offer is more likely to be accepted.)
Rule 100(7) provides detailed guidance on the bases upon which a tax dispute may be settled.
Review of your settlement offer
The ARHD will acknowledge receipt of your offer. Your review will continue with the TRO while your offer is evaluated. We have a settlement track to evaluate offers. If your offer is referred to the settlement track, we will contact you and discuss your offer. If it is not referred to the settlement track, we will inform you of this decision.
Once there is an agreement to settle, the ARHD will prepare the "closing agreement," on behalf of the Department. Oral agreements are not valid or enforceable. The agreement will be the Department’s standard form but will contain the agreed terms and may also contain future reporting instructions. Both you and the Department must sign the closing agreement before your dispute is settled. After settlement, your dispute with the Department will be dismissed.
Your dispute will continue to be processed through the division’s review process.