Georgia Offer in Compromise Guide: Reduce Your State Tax Debt with Help from the Georgia Department of Revenue

If you're behind on your Georgia state taxes and unable to make full payment, the Georgia Offer in Compromise program may help you resolve your tax debt for less than the total amount owed. Managed by the Georgia Department of Revenue (GA DOR), this program allows eligible taxpayers to negotiate a reduced settlement based on their financial situation.

The compromise program aims to help individuals and businesses facing genuine economic hardship or disputing a tax bill they believe is incorrect. Georgia offers this relief when it’s in the best interest of the state and the taxpayer. If the department determines you can't reasonably pay the full amount—or that legitimate doubt exists about your tax liabilities—they may accept a reduced offer.

To qualify, you must be current on all required tax returns and provide detailed supporting documentation, including a collection information statement outlining your taxpayer’s assets, income, and future expenses. This is not a quick fix; Georgia closely reviews each case to prevent abuse and ensure fairness across the system.

This guide will walk you through every step of the process—from understanding eligibility to submitting your application. Whether you're dealing with back taxes, trust fund taxes, or a looming state tax lien, an offer in compromise could be the financial relief you need.

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How the Georgia Department of Revenue's Offer in Compromise Program Works

The Georgia Offer in Compromise program allows qualified taxpayers to legally reduce what they owe the state. It’s not about avoiding taxes—it’s about finding a fair resolution when a taxpayer’s financial reality makes full payment unlikely or unjust. Through this compromise program, the Georgia Department of Revenue (GA DOR) evaluates whether accepting less than the full tax debt serves the taxpayer's and the state's best interest.

Georgia generally considers an offer when one of the following conditions applies: the taxpayer cannot afford to pay the full balance (doubt as to collectibility), there’s a valid dispute about the accuracy of the tax liabilities (doubt as to liability), or paying in full would cause significant economic hardship. The offer must reflect the taxpayer’s ability to pay based on income, monthly payments, assets, and future income potential.

Unlike a payment plan or installment agreement, an offer in compromise is a one-time settlement that may fully resolve all state tax liabilities for the periods listed in the offer. However, full financial disclosure is required through forms like the Collection Information Statement (Form CD-14C or CD-14B). GA DOR uses these to calculate your net equity, income, and allowable living expenses based on national collection financial standards.

If accepted, the offer not only clears your taxes owed but may also prevent the filing or enforcement of state tax liens, state tax executions, or other collection efforts. But the process is strict—submitting an incomplete application, failing to disclose income, or offering too little without justification can lead to automatic rejection.

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Eligibility to Reduce Outstanding Tax Liability Through Georgia’s Compromise Program

Before applying for the Georgia Offer in Compromise, you must meet specific criteria set by the Georgia Department of Revenue. The program is not open to everyone; it's reserved for taxpayers who cannot reasonably pay their tax debt, face economic hardship, or have a valid dispute regarding their tax liabilities.

To be considered, you must first meet the following general requirements:

Basic Eligibility Criteria

• All required tax returns must be filed
  The Georgia Department of Revenue will not consider any application unless your tax returns are current for all applicable years.
  
• You cannot be in an active bankruptcy proceeding
  If you’re currently involved in bankruptcy, the compromise program is unavailable. You must resolve the bankruptcy first before applying.
  
• You must have an existing state tax liability
  Only taxpayers with an unpaid tax bill may apply. If you’ve already paid your balance in full, you do not qualify for an offer in compromise.
  
• Current tax obligations must be satisfied
  This includes timely withholding tax payments, sales tax filings for businesses, and estimated costs if you're self-employed.
  
• You must demonstrate inability or hardship
  To qualify under doubt as to collectibility or economic hardship circumstances, your financial statement must prove that full payment would cause undue burden or is impossible based on the taxpayer’s present financial condition.
  

Failing to meet these baseline qualifications can result in your offer being rejected without review. If you are unsure about your tax situation or have gaps in your filing history, consider consulting a tax attorney, CPA, or accounting services provider before applying.

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Types of Georgia Offers in Compromise for Different Tax Situations

The Georgia Department of Revenue provides three specific offers in compromise types, each addressing a different reason why a taxpayer may be unable or unwilling to pay their state tax debt fully. Choosing the right category is critical. You can only select one type per application—Georgia does not allow combining multiple grounds (such as hardship and liability) in a single request.

Doubt as to Collectibility

This is the most common basis for an offer. It applies when you lack sufficient income, assets, or future earning potential to pay the taxes owed entirely. Georgia will evaluate your overall financial picture, including monthly income, allowable living expenses, and net equity in assets, to determine if your offer reflects the most they can reasonably expect to collect.

To apply under this category, you must submit a completed financial statement (Form CD-14C for individuals or Form CD-14B for businesses) and supporting documentation for all income, assets, and expenses.

Here are examples of situations where doubt about collectibility may apply:

• You earn a low income and cannot make regular monthly payments toward the tax debt
  
• You are unemployed or underemployed and do not own significant assets such as real estate or investments
  
• Retired, you rely on a fixed income to meet your basic living expenses
  

Doubt as to Liability

Use this option if you don't owe some or all of the assessed tax. It is not based on your ability to pay but on legitimate errors or misunderstandings in how the Georgia Department of Revenue determined your liability.

To support this offer, you must submit a written explanation and documentation showing why the liability is incorrect. You are not required to include a financial statement unless you seek relief based on inability to pay.

Valid reasons for doubt as to liability include:

• The state assesses taxes on income you never earned due to a filing or reporting error.
  
• You were the victim of identity theft, and another party fraudulently used your information.
  
• A mistake occurred in how your return was processed, and you were improperly assessed.
  

Economic Hardship

You may apply under this category if you have the resources to pay your full tax debt, but doing so would create severe financial hardship. Georgia considers this option when collecting the full amount would prevent you from covering necessary living expenses.

This type of offer requires both the financial statement and documentation explaining your hardship. The state will review your situation in light of IRS expense standards and consider your future economic outlook.

Situations that may justify an economic hardship claim:

• You or a dependent family member has a chronic illness requiring ongoing and costly medical treatment.
  
• You are an elderly taxpayer with limited income and no realistic future earnings.
  
• You are the sole caregiver for a disabled child, spouse, or elderly parent and cannot work full-time.
  
  

Step-by-Step Guide to Apply for a Georgia Offer in Compromise with Supporting Documentation

Applying for a Georgia Offer in Compromise involves more than submitting a single form. The Georgia Department of Revenue requires a complete, well-documented application demonstrating financial hardship, a dispute over tax liability, or your inability to pay the taxes owed entirely. The steps below will help you prepare and submit an accurate offer.

Step 1: Confirm Eligibility Before Applying

Before you start, ensure you meet the basic program qualifications:

• You must have filed all required tax returns for the tax periods you include in the offer.
  
• You cannot be in an active bankruptcy proceeding.
  
• You must be current on any withholding or sales tax obligations as a business owner.
  
• Your situation must meet one of the following criteria: doubt as to collectibility, liability, or economic hardship.
  

Step 2: Collect and Complete the Required Forms

To begin the application process, gather the following forms:

• Form OIC-1 (Offer in Compromise Application): This is the main form where you will list your offer amount, tax periods involved, and the reason for your request.
  
• Form CD-14C (for individuals) or CD-14B (for businesses): These are detailed financial statements required unless you apply under doubt regarding liability.
  
• Supporting documentation: You must provide proof of income, copies of recent bank statements, valuation of assets, medical bills (if applicable), and other records that support your claim.
  

Step 3: Analyze and Document Your Financial Situation

The Georgia Department of Revenue will evaluate your offer based on your financial disclosure. Be thorough and accurate. You’ll need to document:

• Monthly income from all sources (wages, self-employment, Social Security, rental income, etc.)
  
• Monthly living expenses are aligned with national collection financial standards
  
• Asset valuations, including property, vehicles, investments, and business assets
  
• Continual commitments like loan payments, child support, or court-ordered payments are also included
  

Step 4: Calculate a Realistic Offer Amount

The state uses this formula to determine whether your offer meets their minimum acceptable threshold:

Minimum Offer = Net Equity in Assets + Future Income (after allowable expenses)

You can only offer less than this amount if you demonstrate that full payment would create economic hardship. Remember, offering too little without justification may result in rejection.

Step 5: Assemble and Submit Your Application Package

A complete submission includes:

• A signed and dated OIC-1 form
  
• A completed CD-14B or CD-14C financial statement
  
• A $100 application fee (unless you qualify for the low-income waiver)
  
• An initial payment (if you are not offering a lump sum)
  
• Copies of supporting documents for all income, expenses, and hardship claims
  

You may submit your package in one of two ways:

• By mail: Georgia Department of Revenue, Central Collection Section, 2595 Century Parkway, Suite 339, Atlanta, GA 30345
  
• Online: Through your Georgia Tax Center account at gtc.dor.ga.gov
  

Step 6: Wait for the Department’s Response

Once the department receives your submission, they will:

• Acknowledge receipt of your offer
  
• Conduct an initial review to ensure all documents are included.
  
• Evaluate your financial disclosures and the validity of your claim. m
  
• Request additional documentation if needed.
  

The Georgia Department of Revenue has up to 180 days to process your offer. During this time, collection efforts may pause, but liens or notices may still be filed depending on the situation.

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Required Forms and Financial Statements for Your Georgia State Taxes Offer

Submitting a Georgia Offer in Compromise requires more than just the main application form. The Georgia Department of Revenue expects full financial transparency supported by accurate and complete documentation. Missing or incomplete information is one of the most common reasons offers are rejected or delayed. Use the checklist below to ensure your submission meets state requirements.

Required Forms

• OIC-1 (Offer in Compromise Application):
  This form is the core of your offer. You must list the tax periods involved, the basis for your offer (collectibility, liability, or hardship), and the amount you propose to pay.
  
• CD-14C (Collection Information Statement for Individuals):
  This form is necessary if your application questions collectibility or economic hardship. This form details your income, expenses, assets, and liabilities.
  
• CD-14B (Collection Information Statement for Businesses):
  Business entities must complete this version, which includes information on business income, operating costs, property, and debt.
  

Supporting Documentation

The state requires documentation to verify all details provided in your financial statements. Be prepared to submit:

• Recent pay stubs, profit and loss statements (if self-employed), or other proof of income
  
• Bank statements covering the last three to six months
  
• Current statements for retirement accounts, investments, or insurance with cash value
  
• Vehicle registrations and valuation reports for any personal or business-owned vehicles
  
• Mortgage statements, rent agreements, or other housing-related documents
  
• Documents such as medical bills, prescriptions, or doctor's statements are necessary to support claims of economic hardship
  
• Loan documents, credit card statements, or court orders for ongoing financial obligations
  
• You must also provide a copy of a valid photo ID
  

Fee and Payment Requirements

• Application fee: A nonrefundable $100 payment is required unless you qualify for a low-income waiver. If you’re eligible for the waiver, complete the income certification in Section 4 of the OIC-1 form.
  
• Initial payment: Include the first installment or lump sum, based on your proposed payment plan. This payment is applied to your tax bill even if your offer is rejected.
  

Having all necessary documents in place improves your chances of approval and reduces delays. Double-check that all forms are signed, dated, and accompanied by clear copies of your supporting records before submission.

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What the Georgia Department of Revenue Does After You Submit Your Offer in Compromise

Once your Georgia Offer in Compromise application is submitted, the Georgia Department of Revenue begins a structured review process. While submitting a complete package helps prevent unnecessary delays, the review can still take several months, depending on the complexity of your tax situation.

The department will first acknowledge receipt of your application, which confirms that your submission has been received and entered into their system. From there, they will begin an initial review to ensure that all required forms, payments, and documentation are included. If anything is missing, the department may request additional documentation before continuing.

Once your application is deemed complete, the financial analysis phase begins. During this stage, the Georgia Department of Revenue will verify the details of your financial statement, calculate your net equity, evaluate your monthly income and expenses, and compare your claims to national collection financial standards. If you submitted your offer under economic hardship, they will review your supporting documentation to confirm that full payment would cause undue burden.

Depending on the findings, the department may:

• Accept your offer as submitted
  
• Reject the offer and issue a final notice.
  
• Request modifications or additional proof before making a decision
  

Processing may take up to 180 days. Most collection efforts are typically paused during this time, though the department may still file or maintain state tax liens. It’s also important to note that if your offer is rejected, any payments made are applied to your outstanding tax liability but are not refundable.

Once a final decision is made, you will receive a written notification. If the department accepts your offer, you must comply with all terms; any missed payments or future non-compliance can result in cancellation of the agreement and reinstatement of the full tax debt.

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Common Reasons Georgia Rejects Offer in Compromise Requests (and How to Avoid Them)

Many Georgia Offer in Compromise applications are denied due to avoidable mistakes or incomplete submissions. Understanding why the Georgia Department of Revenue rejects offers can help you avoid these pitfalls and improve your chances of success.

Here are the most common reasons for rejection:

• Incomplete financial documentation
  The department may reject your application without further review if you fail to submit a fully completed financial statement or omit required supporting documentation, such as pay stubs, bank records, or proof of medical expenses.
  
• Unrealistic offer amount
  Offers well below what the department calculates as your reasonable ability to pay will likely be denied. Unless you can prove economic hardship, you must provide at least your net equity plus future income after allowable expenses.
  
• Claiming excess expenses
  Those excess amounts may be disallowed if your monthly expenses exceed national collection financial standards and you don’t provide strong justification. This increases your future income calculation and can result in a higher minimum offer requirement.
  
• Omitted income or assets
  Leaving out income sources—such as rental income, investment returns, or self-employment earnings—or failing to list assets like vehicles or retirement accounts can lead to automatic rejection. Georgia will verify your financial disclosures through third-party databases.
  
• Trust fund tax liability
  Offers involving trust fund taxes (like withheld employee income tax or collected sales tax) are rarely accepted. These represent funds collected on behalf of others, and the state is reluctant to settle such debts.
  
• History of non-compliance
  If you have a pattern of missed tax filings, prior defaulted payment plans, or unpaid tax bills, the department may reject your offer on that basis alone. Showing current compliance is essential.
  

Submitting a complete, honest, well-documented application is the best way to avoid rejection and increase your chances of approval.

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Is the Georgia Offer in Compromise the Right Solution for Your Tax Debt or Hardship?

A Georgia Offer in Compromise can be a powerful solution for taxpayers facing severe financial difficulties or those who believe they do not legally owe the tax amount assessed. However, this program is not suitable for everyone. Before you begin the application process, it is important to evaluate your tax situation and consider alternative options.

You may be a strong candidate for an offer in compromise if:

• You cannot fully pay your outstanding tax liability due to limited income and assets.
  
• You face economic hardship circumstances, such as chronic illness or advanced age, with no realistic earning potential.
  
• You have a valid dispute with the Georgia Department of Revenue over the tax owed or its assessment.
  

However, an installment agreement may be a better option if you can pay through a structured payment plan. These agreements are generally easier to qualify for, require less documentation, and allow you to pay your tax debt in manageable monthly payments without a formal offer.

If you’re unsure which route is best, consider speaking with a licensed tax attorney, CPA, or other accounting services provider. These professionals can help you review your financial profile, navigate Georgia’s tax laws, and determine the best path forward.

Remember, the offer in compromise is not a way to avoid taxes owed—it’s a formal request for relief based on a taxpayer’s ability to pay. Apply only if your circumstances meet the state’s standards and you’re prepared to follow through with the terms if your offer is accepted.

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Frequently Asked Questions

How long does it take to process a Georgia Offer in Compromise?

The Georgia Department of Revenue can take up to 180 days to process a compromise offer. This timeline begins once the department acknowledges receipt of a complete application. Complex cases that involve asset valuations or economic hardship documentation may take longer. If you request additional information during the review period, the process may pause until we receive and evaluate those documents.

Will Georgia stop collection actions while my offer is under review?

Once the Georgia Department of Revenue acknowledges and reviews your offer, active collection efforts will be paused. However, this pause does not guarantee complete protection. The department may still file or maintain state tax liens, and enforcement may continue if your offer is deemed a delay tactic. Submitting a complete and honest offer is essential to receive full consideration.

If the Georgia Department of Revenue rejects my Offer in Compromise, can I file an appeal?

Yes, you have the right to appeal a rejected offer. If your application is denied, the Georgia Department of Revenue will send you a written notice explaining the decision. You must file your appeal within 30 days of receiving this notice. During the appeal, you can provide additional documentation, clarify your financial situation, or correct any errors that may have contributed to the initial denial.

Do I qualify for the $100 application fee waiver?

You may qualify for the low-income fee waiver if your household income falls below certain thresholds based on family size and location. This information is outlined in Section 4 of the OIC-1 form. To claim the waiver, you must complete the low-income certification section and provide proof of income.  

Can I include multiple tax years in one offer?

Yes, the Georgia Department of Revenue allows you to include more than one tax year or type in a single offer in compromise. Each tax period should be listed individually on the OIC-1 form. Your offer must reflect the total amount required to settle all included liabilities. Ensure that supporting documents and financial disclosures apply to the full range of tax periods listed.

What happens if I default on an accepted offer?

If you fail to comply with the terms of an accepted offer—such as missing payments or falling out of compliance with future tax filings—the agreement may be revoked. The Georgia Department of Revenue can then reinstate the full amount of the original tax debt, minus any payments made. You will also become subject to renewed collection activity, including liens and garnishments.