Audience: Individuals

The Offer in Compromise (OIC) Program allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability or doing so creates a financial hardship. The OIC Program can be used for all taxes administered by the Comptroller.

OIC FAQs

Offer in Compromise Program

Eligibility Requirements

In order to apply for this program, you must meet all of the following eligibility requirements:

• You have incurred a delinquent tax liability that has resulted in an assessment.
• You have declined to pursue or exhausted all avenues of administrative appeal. You cannot make an offer in compromise if there is any issue currently under appeal.
• Two years must have passed since you became liable for the tax.
• You must have filed all returns required to be filed with the Comptroller's Office or have been assessed by the Comptroller's office for not filing a required tax return.
• You must not be currently involved in an open bankruptcy proceeding.
• For taxes owed by a business or the officers of the business, the business must be closed.
• You are unlikely to be able to make payment in full any time in the foreseeable future due to your financial situation. You either are without resources or unable to apply present and/or future resources to paying the outstanding tax liability.

OIC Forms & Instructions

Please verify that you satisfy all of the eligibility requirements before completing the required forms.

When you complete Form MD 656, you should address all of the reasons you believe you cannot, or should not, pay the full amount due. You should offer an amount you are able to pay. A mere unwillingness to pay will not excuse you. We will consider the following circumstances when deciding whether or not to accept your offer in compromise:

• Insufficient resources: If you don't have enough assets or income to pay the full amount, you must include with Form MD 656 a complete financial statement, Form MD 433-A.
• Economic or other hardship: If you have enough assets to pay the full amount, but believe that because of your exceptional circumstances requiring full payment would cause an economic hardship or would be unfair and inequitable, you must include with Form MD 656 a complete financial statement, Form MD 433-A.

Forms: Offer in Compromise

MD 656

Collection Information Statement

MD 433-A Individual

Please submit forms MD 656 and MD 433-A electronically to oic@marylandtaxes.gov or by mail to:

Offer in Compromise Program
Comptroller of Maryland
7 St. Paul Street, Room 210
Baltimore, Maryland 21202