Rule 100 settlements

Is it possible to settle with the Department?

Yes. The Department can settle tax disputes when appropriate.

What criteria does the Department consider for settlement?

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.

When will the Department not consider settlement?

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.

What if I want to settle because I cannot afford 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 do I propose 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.

What happens once I propose settlement?

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.

What happens once a settlement is accepted?

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.