1. Resources for MVLS Volunteers: Looking for Pro Bono Cases?

2. New Pro Bono Portal

3. facebook.com/MVLSProBono/
Maryland Volunteer Lawyers Service
@MVLSProBono
Visit for more info on upcoming training and clinics!

4. MARYLAND’S OFFER-IN-COMPROMISE PROGRAM
Melinda Dunmire,
Assistant to the Director
Chair of OIC Case Review Board
Andrew “Jay “ Maschas,
Assistant Director
MARYLAND’S OFFER-IN-COMPROMISE
PROGRAM

5. Offer-In-Compromise – Statutory Authority
Statutory Authority for Maryland’s Offer-In- Compromise program
Maryland State Finance and Procurement Article § 6-219
Tax-General Article §

6. Offer-In-Compromise - Statutory Authority
MD State Finance and Procurement Section 6-219
the Comptroller may settle a claim of the State that has been in arrears for at least 2 years
Before settling a claim under this section, the Comptroller shall examine the claim thoroughly and shall be satisfied that the State could not collect the claim through legal process.
To settle a claim so as best to serve the interests of the State, the Comptroller may abate, wholly or partly, the principal or interest that is due to the State.
If a claim is settled without payment in full, the Comptroller shall keep a record that states the facts on which the settlement was based.
The record shall be kept in the Office of the Comptroller

7. Offer-In-Compromise - Statutory Authority
Tax-General Article §
(a) If a tax under this article is not paid when due, the Governor, tax collector, or Treasurer shall ask a qualified attorney who is a regular salaried employee of the Comptroller or the Attorney General to bring an action against the person responsible to pay the tax, unless a lien on real property sufficiently secures the tax or a judgment in the action would not be collectible.
(b)(1) If a request is made under subsection (a) of this section, the attorney or the Attorney General shall bring the action.
(c) If the attorney or Attorney General and the tax collector agree that the full amount of the claim is not collectible, the attorney or Attorney General may:
(1) compromise the claim;
(2) accept a lesser amount; and
(3) issue a release of the claim or a satisfaction of the judgment.

8. Offer-in-Compromise - Overview
Offer-in-Compromise (“OIC”) program is “used to resolve tax liabilities with the Comptroller when the taxpayer is unable to pay in full and all other efforts to resolve the liability have been unsuccessful.”

9. Offer-in-Compromise - Overview
OIC Program is available for “all taxes administered by the Comptroller” which includes:
Sales and Use Tax
Individual Income Tax
Admissions and Amusement Tax
Corporation Income Tax
Withholding Tax
OIC is “not an appeal of the tax liability”
TPs with appealable issues should file an appeal with H&A

10. Offer-in-Compromise – Eligibility Requirements
TP incurred a delinquent tax liability that has resulted in an assessment.
TP exhausted all other avenues of administrative appeal.
TP cannot make an offer-in-compromise if there is any issue remaining that can be appealed.
Two years must have passed since TP became liable for the tax.
TP must be current with respect to all return filing requirements with the Comptroller’s Office.
TP must not be currently involved in an open bankruptcy proceeding.
TP is unlikely to be able to make payment in full any time in the foreseeable future due to TP’s financial situation.
TP is either without resources or unable to apply present and/or future resources to paying the outstanding tax liability.

11. Offer-in-Compromise – Forms and Instructions
Forms and Instructions available online at
Two sets of Forms
Offer in Compromise Application – Form 656
Collection Information Statement
Individual – MD 433-A
Business – MD 433-B

12. Offer-In-Compromise – Form MD 656
Item 1 – Name and Address of Taxpayer
Item 2 , 3, 4 – SSN, EIN, or CR Number
Item 5 – Tax Type and Tax Period
Items 6 – Reason for OIC
Doubt as to liability. If you believe you don't owe the amount due, you must include with Form MD 656 a detailed explanation of the reason(s) you believe you do not owe the tax.
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 for individuals and/or Form MD 433-B for businesses.
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 and/or Form MD 433-B.

13. Offer-In-Compromise – Form MD 656
Item 7 – Offer to Pay,
TP can submit:
Payment in full with offer
Deposit pending acceptance
No Deposit (Payment to be made within ___ days
$0.00 Offer
Request for Payment Plan

14. Offer-in-Compromise – Form MD 656
Item 8 – Agree to Conditions
Payment will be applied ‘in the best interests of the state.”
Payment will refunded if the offer is declined unless TP agrees to writing to apply the payment to balance due.
TP agrees to waive the right to appeal the tax liability if the offer is accepted.
The Comptroller’s office can collect on the entire amount if the TP defaults on the accepted OIC offer.
TP must stay in compliance for 3 years from date of acceptance
Item 9 – Explanation of Circumstances
Reasons for Requesting an Offer-In-Compromise
Facts and Circumstances

15. Offer-in-Compromise – Collection Information Statements
MD 433-A, Collection Information Statement for Individuals
MD 433-B, Collection Information Statement for Businesses
Does a business taxpayer need to submit both MD 433-A and MD 433-B?
Is the business closed?

16. Offer-in-Compromise – When to Advise a TP to file an OIC?
TP and Liability meet requirements:
TP does not have available funds to full pay tax in full
Liability is more than two years old or written off
When Not to Advise a TP file an OIC
Liability does not meet eligibility requirements
TP can full pay liability without substantial hardship
Liability may be resolved under penalty and interest waiver guidelines
There is an appealable issue

17. Offer-in-Compromise – How do I submit the OIC?
Submit Form MD 656 and MD 433-A and/or MD 433-B to:
Offer in Compromise Program
Comptroller of Maryland
301 West Preston Street, Room 203
Baltimore, Maryland 21201
For more information about the Offer in Compromise Program, us at or call from Central Maryland or from elsewhere.

18. Offer-in-Compromise Program Considerations in Decisions
Age – taxpayer & debt
Health of taxpayer and family members supported by taxpayer
Education
Work history
Employability
Source of Income – Social Security Benefits vs. Wages
Living Situation
Reason for Tax Liability
Past Compliance
Past Bankruptcies
Location of Taxpayer
Liens Filed

19. Offer-in-Compromise - Review and Decision
The Comptroller’s Office will review the documentation, the particular facts and circumstances, and account submitted with the original offer to determine whether the OIC offer should be accepted.
If the Comptroller determines that your offer is acceptable, the TP will be notified in writing and payment, if necessary, will be requested from the TP.
it is determined that an OIC offer is not acceptable but the Comptroller’s office would accept a higher amount, the TP will receive counteroffer in writing with the acceptable amount.
If offer is declined, then the TP will receive notice of decline.

20. Offer-in-Compromise - Review and Decision
All decisions under the Offer-in-Compromise Program are final and cannot be appealed.
The taxpayer may make a counteroffer if the offer is declined.
Must remain current with future filings for at least 3 years after Offer is accepted. Full liability will become due immediately for failure to be current.

21. Offer-in-Compromise vs. Hardship Liability Write-off
Must meet requirements
Use specified forms
Decision is non-appealable
Liability is permanently discharged
Tax liens are released
May be filed at any time
Informal process
Decision is non-appealable
Liability is “written off” account, but not permanently discharged
Tax liens remain in place
Refunds & payments intercepted and applied to liability

22. Offer-in-Compromise Case Study #1
TP is 66 years old. She lives in an apartment in Maryland. TP receives social security income (“SSI”)of $1,200 per month. Her rent is $600 per month. Her expenses match her SSI income. TP writes that she has severe medical issues.
TP owes $5, in individual income tax, interest, and penalty for tax years 1993 and The income tax due for both years is $1,
TP offers $25.00 to resolve the liability.

23. Offer-in-Compromise Case Study #2
TP is 29 years old. TP lives with his parents in Maryland. TP is recently unemployed, but seeking employment.
TP owes $1, in individual income tax, interest, and penalty for tax year TP owes income tax due to failure to withholding any taxes on wages earned during as a bartender.
TP offers $0.00 and writes that he is currently unable to pay off liability and wants a fresh start.

24. Offer-in-Compromise Case Study #3
TP is 55 years old. TP lives in West Virginia with his wife and three children. TP works as a general manager at a retail shop. TP earns $42, Mrs. TP earns $27, as a clerk.
TP had a business, ABC, Inc., in Maryland. However, TP lost his business due to the great recession in TP moved to West Virginia in 2010.
ABC, Inc. owed $55, in sales and use tax, interest, and penalties for April 1, 2006 to July 30, A lien has been filed against TP as an officer of ABC, Inc. The account balance for ABC, Inc. has been written off by collections. Mrs. TP was not responsible. There have been no collections on the account since 2009 (income tax refund offset).
TP offers $24, under a 24 month payment plan to resolve the liability. The sales and use tax due was $22,

25. Offer-in-Compromise Case Study #4
TP is 56 years old. TP lives in Maryland. TP is divorced with one child. TP has $250 in disposable monthly after subtracting expenses from income.
TP works as a manager of a retail store for the past five years. TP had a federal AGI of $65,000.
TP had a business, 301 Preston Construction, in Maryland. The TP has been assessed as an officer of 301 Preston Construction’s withholding tax liabilities exceed $45, for 2010 to 2013, plus penalties and interest, for a total of $90,000. A lien has been filed against the corporation and the individual TP. TP has not made a payment on the account.
TP offers $10, to settle the withholding tax liability. TP will borrow the funds from his 401(k).