Understanding the Kansas Offer in Compromise: Your Path to Tax Relief

Struggling with back taxes or growing tax debts in Kansas can be overwhelming. Whether you’ve received a notice from the Kansas Department of Revenue or are worried about a tax lien, warrant, or hefty collection fees, you're not alone. Thousands of individuals and businesses across the state face financial hardship, making it difficult—if not impossible—to pay what they owe in full.

Kansas offers the Petition for Abatement program to help qualified taxpayers resolve their taxes for less than the total amount owed. This state tax relief option works like the federal IRS Offer in Compromise. It allows eligible filers to request a settlement based on their financial hardship, income, and asset limitations. If you meet the criteria, the program may significantly reduce debt, stop enforced collection efforts, and offer long-term financial relief.

This comprehensive guide will explain how to apply for the Kansas Offer in Compromise alternative, who is eligible, which forms are required, and how to avoid common mistakes. You’ll also learn what to expect during the review process, what happens after submission, and how to contact the right office in Topeka. Whether you’re an individual with unpaid income taxes or a business with an Employer Identification Number, understanding your options could make a meaningful difference in your financial future.

What's a Kansas Offer in Compromise?

The Kansas Petition for Abatement is the state’s version of an Offer in Compromise, allowing taxpayers to settle their tax debts for less than the full amount owed. Administered by the Kansas Department of Revenue, this program is designed for those who cannot reasonably afford to pay their full state tax liability due to financial hardship or valid disputes over the assessed amount.

Unlike the IRS Offer in Compromise, Kansas uses a different name—Petition for Abatement—but the concept is similar. You may qualify for a reduced settlement if you demonstrate that collecting the full debt would be impossible or unfair. This option helps the state recover what it reasonably can while providing financial relief to struggling taxpayers.

There are two main reasons why the state may consider a settlement:

• Doubt about Collectability: You cannot pay the full amount due, even over time, based on your income, expenses, assets, and liabilities.
• Doubt about Validity: You believe the assessed amount is incorrect and can provide evidence supporting your petition.
  
  

While the program may be beneficial, it does not guarantee approval. Kansas generally denies applications if you can pay through a payment plan, liquidate assets, or use available credit. Also, the state may continue collection actions—like filing a tax lien or tax warrant—even while your petition is under review.

Ultimately, the Kansas Petition for Abatement serves the taxpayer and the revenue authority by allowing a fair and practical resolution to unmanageable tax debts. It’s a path worth exploring if you're facing serious financial difficulty and want to avoid the full weight of state enforcement.

Who Is Eligible for a Kansas Petition for Abatement?

Before you apply for a Kansas Petition for Abatement, it’s critical to understand whether you qualify. The Kansas Department of Revenue employs stringent criteria to ascertain eligibility, and neglecting even a single requirement could lead to the denial or return of your petition.

Filing and Payment Compliance

To be considered, you must have filed all required tax returns with the state and the IRS. Kansas will not review your application if any returns are missing. You must also be current with estimated payments for the current year, including income tax or business-related liabilities associated with your Employer Identification Number.

Bankruptcy Restrictions

You cannot apply if you are currently in an open bankruptcy case. The state cannot resolve tax debts through this program until the statute governing your bankruptcy case closes. You may consult your bankruptcy attorney or the court before submitting a petition.

Financial Hardship Criteria

You may qualify for tax relief through a Kansas Petition for Abatement if your financial situation meets one or more of the following conditions:

• The statute of limitations for the state to collect your tax debts has expired or is set to expire soon.
• You reside outside Kansas and do not own or control assets within the state’s jurisdiction.
  
  
• Your only source of income is Social Security benefits or other public assistance programs, and you lack the means to make any payments.
• You are completely insolvent and cannot recover financially in the foreseeable future.
• You are permanently disabled, mentally ill, or medically incapacitated and unable to work or earn income.
• You are a low-income individual or senior citizen with chronic medical issues that prevent you from maintaining employment or generating revenue.
• Due to jurisdictional or legal limitations, the Department of Revenue has no legal authority to collect the specific tax debt.
  
  

Your financial records indicate that expecting you to pay your back taxes is unreasonable, even though you meet all the necessary filing and residency criteria. In that case, you may benefit from submitting a petition under this program.

Types of Petitions: Collectability vs. Validity of Debt

Kansas offers two types of petitions under its Offer in Compromise alternative. Understanding the differences between these options will help you choose the correct form and strengthen your application.

Kansas Offer in Compromise—Petition Comparison Table

1. Purpose

• Collectibility Petition (Form CE-5): Used when you're unable to pay the full tax liability due to financial hardship.
• Validity of Debt Petition (Form CE-4): Used when you believe the tax debt is incorrect or that you are not legally responsible for it.

2. When to Use

• Form CE-5: When paying the full tax amount would interfere with essential living expenses such as rent, food, healthcare, or other basic needs.
• Form CE-4: When there are disputes about the tax amount, errors in assessment, or misapplied tax responsibilities (e.g., audit disagreements or a wrong taxpayer identified).

3. Common Scenarios

• Form CE-5:
  • Low income with high cost of living
  • Heavy debt load
  • Few or no valuable assets
• Form CE-4:
  • Audit errors or disagreements
  • Tax debt linked to the wrong person or business
  • Filing errors resulting in an incorrect assessment

4. Required Documentation

• For CE-5 (Collectibility):
  • Detailed monthly income and expense reports
  • List of personal and business assets
  • Breakdown of outstanding debts
  • Recent bank statements, pay stubs, or financial records
• For CE-4 (Validity of Debt):
  • Written explanation of the dispute or error
  • Relevant supporting documents such as:
    • Audit reports
    • Corrected tax returns
    • Correspondence from the tax authority

5. Evaluation Focus

• Form CE-5: Evaluates your ability to pay and whether your financial situation justifies settling for less than the full amount owed.
• Form CE-4: Assesses whether the tax debt is legally and factually valid.

6. Main Form Used

• Collectibility Petition: Form CE-5
• Validity of Debt Petition: Form CE-4

Kansas vs. IRS Offer in Compromise: What’s the Difference?

Although the Kansas Petition for Abatement and the federal IRS Offer in Compromise serve a similar purpose—settling tax debts for less than the full amount owed—there are key differences between how the state and federal programs are administered. Understanding these differences will help you choose the right option based on your eligibility, financial situation, and tax obligations.

The following outlines how the two programs compare:

1. Program Name

• IRS: Known as the Offer in Compromise (OIC).
• Kansas: Referred to as the Petition for Abatement.

2. Application Fee

• IRS: $205 fee, which may be waived for low-income applicants.
• Kansas: $50 fee, potentially waivable if the applicant is completely insolvent.

3. Initial Payment Requirement

• IRS: Requires 20% of the offer amount for lump-sum offers at the time of application.
• Kansas: Also requires 20% of the total offer amount, regardless of whether the full amount is paid upfront or in installments.

4. Maximum Payment Terms

• IRS: Payment plans may extend up to 24 months.
• Kansas: Typically expects the full balance to be paid in five or fewer installments.

5. Eligibility During Bankruptcy

• IRS: Applicants currently in open bankruptcy are not eligible.
• Kansas: Also excludes individuals from applying if they are in open bankruptcy proceedings.

6. Collection Activity During Review

• IRS: Generally suspends collection actions while the OIC is under review.
• Kansas: May continue with enforcement actions, such as tax warrants or liens, during the review period.

7. Appeal Rights

• IRS: Denied applicants have the right to file a formal appeal within 30 days.
• Kansas: Does not offer an appeal process; decisions are final.

8. Public Disclosure

• IRS: Offers exceeding $1 million are disclosed to the public.
• Kansas: Publishes an annual report listing all abatements greater than $5,000.

Unlike the IRS, the Kansas Department of Revenue does not automatically suspend collection activities during the petition review process. A tax lien or warrant could still be issued while your application is considered.

Additionally, Kansas's lack of appeal rights makes it especially important to submit a complete and accurate petition the first time. While you can reapply if your financial situation changes significantly, you cannot formally challenge a denial through an appeal.

You may apply to both programs simultaneously if you owe back taxes on both federal and Kansas. However, each application must be submitted separately, with its forms, fees, and financial documentation.

Step-by-Step Kansas OIC Application Process

Applying for a Kansas Petition for Abatement requires careful attention to detail and thorough financial documentation. Submitting an incomplete or incorrect petition can result in delays or denial. The steps below outline the complete process for requesting state tax relief.

Step 1: Gather Your Financial Information

Before starting the petition, you must complete a picture of your financial condition. This includes all sources of income, monthly living expenses, asset values, and outstanding debts.

• You should collect recent pay stubs, Social Security benefit statements, or any other documentation that shows your household income.
• You must record your monthly expenses, including housing, food, medical care, transportation, and utility costs.
• You must list your assets, such as bank accounts, real estate, vehicles, investments, and available credit limits.
• You should also gather evidence of debts and liabilities, such as credit card balances, medical bills, or loan obligations.
  
  

Step 2: Complete the Correct Petition Form

Select the appropriate petition form based on your situation.

• Suppose you cannot afford to pay the full tax debt. In that case, the Kansas Department of Revenue employs stringent criteria to ascertain eligibility, and neglecting even a single requirement could lead to the denial or return of your petition. A validity petition.
• All petition forms must be signed under penalties of perjury and notarized before submission.
  
  

Step 3: Fill Out the Financial Statement

The financial statement provides the Kansas Department of Revenue with a detailed overview of your financial status.

• Individual taxpayers must complete Form CE-3, which requires personal income and expense details.
• Business entities must complete Form CE-2, which includes business income, expenses, and asset information.
• Accurate completion of these forms is essential, as they determine your eligibility for relief.

Step 4: Include All Required Supporting Documentation

You must attach supporting records to validate your financial claims.

• Include copies (never originals) of bank statements, pay stubs, medical expense records, mortgage statements, and utility bills.
• Each financial form includes a checklist at the end, outlining the documentation required for submission.
• Incomplete documentation may delay or invalidate your petition.
  
  

Step 5: Submit Additional Required Forms

Your tax debt and professional representation may necessitate the inclusion of additional documents.

• If your total tax liability is $5,000 or more, submit a Waiver of Confidentiality (Form CE-6 for businesses or Form CE-7 for individuals).
• If you are working with a tax attorney, accountant, or authorized representative, include a completed Power of Attorney form (Form D0-10).
• These forms allow the state to share confidential tax information with your designated representative.
  
  

Step 6: Calculate Your Offer Amount and Choose Payment Terms

Kansas offers two payment options to satisfy your proposed settlement.

• Under Payment Option 1, you must pay 20% of the total offer upfront and pay the remainder in no more than five payments.
• Under Payment Option 2, you make your first payment with the petition and propose your payment schedule; however, longer payment terms may reduce your chances of approval.
• If your plan extends beyond 90 days, Kansas charges a $25 fee for administering the payment plan.
  
  

Step 7: Submit Your Application Package

You can submit your petition once your forms are complete and your documentation is assembled.

• You may send your package by mail, fax, or secure electronic mail. The mailing address is Kansas Department of Revenue, Problem Resolution Team, P.O. Box 12005, Topeka, KS 66601-2005.
• The fax number for submissions is 785-296-0820.
• To request a secure email address for electronic submission, call the department at 785-296-6124, option 4.
• Remember to retain a complete copy of your submission, including the date you sent it, for your records.
  
  

This step-by-step process ensures your petition is organized, complete, and prepared for a thorough review.

Common Reasons Petitions Are Denied

Submitting a Kansas Petition for Abatement does not guarantee approval. The department reviews every petition carefully and often denies incomplete, unsupported, or unrealistic ones. Understanding the most common reasons for denial can help you avoid unnecessary delays or rejections.

• A petition is often denied when required forms or documentation are missing. Incomplete financial statements, unsigned petitions, or omitted attachments may result in automatic rejection without review.
  
  
• If you can pay your full tax debt through a payment plan, liquidation of assets, or other means, your petition will likely be denied. The state evaluates your reasonable collection potential before accepting any compromise.
  
  
• Offering an unreasonably low amount compared to your financial capacity may lead to denial. Kansas expects your offer to reflect a fair percentage of what you can pay, based on verified income and assets.
  
  
• Petitions are not considered if you have unfiled tax returns. You must file all required Kansas tax returns before your request will be reviewed. This includes any outstanding individual or business tax filings.
  
  
• You are ineligible to apply for a Petition for Abatement while an open bankruptcy case is pending. Tax liabilities must be resolved through that process if a bankruptcy case is underway.
  
  
• Temporary financial difficulties or voluntary lifestyle choices are not sufficient grounds for abatement. You must demonstrate significant and ongoing financial hardship that prevents you from meeting your tax obligations.
  
  

Addressing these risk areas before submitting your petition improves your chances of acceptance and avoids unnecessary complications in the review process.

What Happens After You Apply?

Once you submit your Kansas Petition for Abatement, the Kansas Department of Revenue begins its evaluation. While this process may take several months, understanding each stage can help you prepare and avoid surprises.

Initial Review and Processing

The department will review your submission to confirm that your petition is complete and meets all eligibility criteria. This includes verifying that you have filed all required tax returns, submitted the correct petition form, and provided necessary documentation.

• If your petition is incomplete or you fail to meet basic eligibility requirements, your application may be returned without further review. You will receive a written explanation identifying what must be corrected before resubmitting.
  
  

Financial Analysis

The department will conduct a detailed financial analysis if your petition passes the initial screening.

• The Kansas Department of Revenue will examine your income, assets, debts, and expenses to determine whether your offer reflects a fair and reasonable resolution.
• They will assess whether you can pay the full amount over time through available assets or payment plans.
  
  

Collection Activities During Review

Unlike the IRS, Kansas may continue enforcement actions while your petition is under review.

• The state can still issue a tax warrant or file a tax lien even if your application is pending.
• Any payments submitted with your petition, including the application fee or first installment, will be applied directly to your tax debt and are generally non-refundable.
  
  

Final Decision and Next Steps

After completing its review, the department will send you a written decision.

• If your petition is approved, you must comply with all payment terms and remain current on all future tax obligations. Failing to do so could void your agreement.
• If your petition is denied, the decision is final and cannot be appealed. However, if your financial situation changes significantly, you may submit a new petition with updated documentation.
  
  

Knowing what to expect can help you stay organized, avoid missteps, and respond promptly to any follow-up communication from the Kansas Department of Revenue.

Required Documents and Submission Checklist

Submitting a complete and accurate application package is essential to maximize your chances of success with a Kansas Petition for Abatement. Missing documents or incorrect information can result in delays, denial, or the loss of eligibility for relief. The Kansas Department of Revenue has specific requirements to determine whether you qualify for a reduced settlement of your tax debts.

Ensure you include all relevant documents and correctly file the forms before petitioning. 

Pre-Application Requirements

• You must have filed all required state and federal tax returns. If any filings are missing, your petition will not be reviewed until you are fully compliant.
• All estimated tax payments for the current year must be up to date, including personal income taxes and any business taxes tied to your employer identification number.
• You cannot apply while in an open bankruptcy proceeding. You must wait until the bankruptcy case is closed, as tax relief must be resolved under that legal process.
  
  

Required Forms and Attachments

• Complete either Form CE-5 for a collectability petition or Form CE-4 for a validity of debt petition, depending on your financial circumstances.
• Submit a detailed financial statement: Form CE-3 for individual taxpayers or Form CE-2 for business applicants.
• Include the $50 application fee unless you meet the criteria for a fee waiver due to insolvency or other qualifying hardship.
• Make the required initial payment, generally 20 percent of your proposed compromise offer, as part of the formal request for abatement.
• If your tax liability exceeds $5,000, include the appropriate Waiver of Confidentiality: Form CE-6 for business taxes or Form CE-7 for individual income taxes.
• If a representative acts on your behalf, submit Form D0-10 (Power of Attorney) to authorize confidential communication between the state and your advisor.
• Attach supporting financial documents such as pay stubs, bank statements, mortgage records, utility bills, and asset valuations. Only submit copies—never original records.
  
  

Submission Instructions

• Please send your complete application package to the Kansas Department of Revenue’s Problem Resolution Team in Topeka or mail the documents to P.O. Box 12005, Topeka, KS 66601-2005.
• You may also fax your petition to 785-296-0820 or call 785-296-6124, option 4, to request a secure email address for electronic submissions.
• Keep a full copy of your petition, including the mailing or fax confirmation page and the submission date, for your records.
  
  

Preparing and submitting your petition accurately will help prevent unnecessary delays and give you the best chance of obtaining meaningful tax relief under this state-administered program.

Frequently Asked Questions (FAQs)

How long does it take to review a Kansas Petition for Abatement?

The Kansas Department of Revenue generally takes several months to review your petition. The exact time depends on case complexity, documentation quality, and current processing volume. Expect at least 3 to 6 months from the submission date. You should monitor your mail for any notice or request for additional information during the review.

Can I apply for a Kansas Petition and an IRS Offer in Compromise?

You may apply to the Kansas Department of Revenue and the IRS separately. Each program has its eligibility criteria, required forms, and submission process. You’ll need to file separate petitions and provide complete documentation for each agency to consider your tax debts and financial situation independently.

What happens if I default on my Kansas payment agreement?

The state may revoke your agreement if you fail to make your scheduled payments or miss a tax filing after approval. This could result in reinstating the full debt and resuming collections, including a tax lien or warrant. Always stay current with tax returns and future income tax obligations to maintain the benefits of the compromise.

Will settling my Kansas tax debts impact my credit score?

Although the Kansas Department of Revenue does not directly report to credit agencies, any filed tax lien or warrant becomes public record and may appear on your credit report. Successfully resolving your tax debts through the abatement program may help you avoid further damage to your credit caused by hefty collection fees or enforced liens.

Is professional assistance required to file a Kansas Petition for Abatement?

No, you are not required to hire a professional to file your petition. However, a tax professional can help you review eligibility criteria, complete the correct form, and submit accurate financial documentation. If you choose to work with a representative, file a Power of Attorney (Form D0-10) to authorize secure and confidential communication with the Kansas Department.

Can I withdraw my petition after submission?

Kansas law does not formally address petition withdrawal procedures. However, your application and any payments or fees submitted are generally nonrefundable once filed. Before deciding to withdraw, consult the Kansas Department of Revenue to understand any consequences, and be sure to contact them by phone or written request.

What types of taxes qualify for the Kansas Petition for Abatement?

The Kansas abatement program covers various tax types, including individual income tax, business-related taxes, and back taxes tied to your employer identification number. To be considered for compromise or settlement, each tax debt must meet Kansas eligibility standards and be accompanied by the appropriate form and financial disclosures.

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