Pub 56, Offer in Compromise, is the brochure from the California Department of Tax and Fee Administration (CDTFA) that explains its Offer in Compromise (OIC) program for individuals and businesses that cannot pay a tax or fee liability in full. It covers who may make an offer, how offers are evaluated, how to apply and what happens after you pay. On this page you can view and download the official PDF; you apply with a separate CDTFA application, and the agency publishes the brochure at cdtfa.ca.gov.
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What is Pub 56?
Publication 56, Offer in Compromise, is the California Department of Tax and Fee Administration (CDTFA) brochure describing the Offer in Compromise (OIC) program, a payment alternative for individuals and businesses that cannot pay their tax or fee liability in full.
An offer in compromise is a proposal to pay CDTFA less than the full liability. If CDTFA accepts it, you are no longer liable for the full amount due, and CDTFA releases related tax liens as provided by the terms and conditions of your offer.
The brochure is a guide, not an application. It answers practical questions: which offers are accepted, when you pay, what the final steps are, how long an answer takes, how offers are evaluated, and whether prior payments are credited. To apply, you complete the Offer In Compromise Application, CDTFA-490 for individuals or CDTFA-490-C for all others, which are separate documents.
CDTFA also publishes the brochure in Spanish (Pub 56-S), Chinese (Pub 56-C), Korean (Pub 56-K) and Vietnamese (Pub 56-V). The Spanish application is CDTFA-490-S, and the Spanish version for corporations, LLCs and partnerships is CDTFA-490-C-S.
Who needs to file Pub 56?
Anyone who owes CDTFA a tax or fee liability and cannot pay it in full may use this brochure to see whether an offer in compromise fits. Under the brochure, you may currently make an offer if you:
- have a tax or fee liability on a closed account;
- are no longer associated with the business that incurred the liability, or a similar business;
- do not dispute the amount of tax or fee you owe; and
- cannot pay the full amount in a reasonable amount of time.
From January 1, 2009 until January 1, 2028, CDTFA also considers offers from open and active businesses that have not received reimbursement for the taxes, fees or surcharges owed; successors of businesses that may have inherited liabilities from their predecessors; and consumers who are not required to hold a seller's permit but incurred a use tax liability.
CDTFA will not accept an offer if you have assets or income available to pay the liability in full. An accepted IRS, FTB or EDD offer does not make CDTFA approve yours automatically; CDTFA evaluates it as the brochure describes. If your business is still active, call the OIC Section at 1-916-322-7931 to find out if you are eligible.
When to file Pub 56
The brochure sets no filing deadline of its own. Read it when you cannot pay a CDTFA tax or fee liability in full and are considering an offer in compromise, before you complete the application.
After CDTFA receives your application, it sends an acknowledgment letter and will do its best to make a recommendation within 30 days of receiving a completed application. This can take longer if your account is more complex, the application is incomplete or CDTFA needs more information. While your offer is pending, you must continue any payments under an installment payment agreement or earnings-withhold order. In most cases CDTFA does not start new collection action during that time, unless delaying collection jeopardizes its ability to collect the liability.
The categories of open businesses, successors and consumers described in the brochure apply from January 1, 2009 until January 1, 2028.
Documents you need
- Offer In Compromise Application: CDTFA-490 if you are an individual, or CDTFA-490-C for corporations, LLCs, partnerships and all other applicants.
- Supporting documentation described in the application, submitted together with it.
- Written approval from the person who paid, if someone else made your deposit and you want CDTFA to apply it to your liability after a denial.
How to fill out Pub 56
Check whether you can make an offer
Read the sections on who may make an offer and which offers are accepted. You must not dispute the amount owed and must be unable to pay it in full in a reasonable time.
Use the pre-qualifier or call CDTFA
If your business is closed, try the online OIC Pre-qualifier Tool. If your business is still active, call the OIC Section at 1-916-322-7931 to find out if you are eligible.
Choose the correct application
Use CDTFA-490 if you are an individual, or CDTFA-490-C for all others. Applications are available from your local CDTFA office or the division handling your account, the CDTFA website and the Customer Service Center.
Complete the application and documentation
Fill in the application and gather the supporting documentation it describes. If you agreed to an installment plan or earnings-withhold order, keep making those payments.
Submit without any payment
Deliver the application to your local CDTFA office or the division that handled your account. Do not include a payment with the offer.
Watch for CDTFA's letters
CDTFA sends an acknowledgment letter, then writes to ask for the full offer amount if the OIC Section recommends acceptance. After you pay, CDTFA management decides and sends the final decision in writing.
How to submit Pub 56
Pub 56 itself is not submitted. You apply by sending the completed Offer In Compromise Application to CDTFA, through either of these channels:
- Local CDTFA office: submit the application with its supporting documentation to your local CDTFA office. The brochure lists office telephone numbers for cities such as Sacramento (1-916-227-6700) and San Diego (1-858-385-4700).
- Division that handled your account: submit it to the division that handled your account. Either office or division forwards your request to the Offer in Compromise Section for evaluation.
Use CDTFA-490 if you are an individual and CDTFA-490-C for all others. Do not submit any payment with your offer. If CDTFA's OIC Section recommends acceptance, it writes to you and asks you to pay the full amount you proposed.
For questions, call the Customer Service Center at 1-800-400-7115 (TTY:711), Monday through Friday from 7:30 a.m. to 5:00 p.m. (Pacific time), except state holidays, or the OIC Section at 1-916-322-7931. For out-of-state accounts call 1-916-227-6600. FillingPDF lets you view and download the official PDF; submission follows the agency's channels above.
Common mistakes to avoid
- Sending a payment with the offer; the brochure says not to submit any payment with your offer, and CDTFA asks for payment only if the OIC Section recommends acceptance.
- Using the wrong application: CDTFA-490 is for individuals and CDTFA-490-C is for all others.
- Making an offer while you have assets or income available to pay the liability in full; CDTFA will not accept it.
- Assuming an accepted IRS, FTB or EDD offer means CDTFA approves yours automatically; CDTFA evaluates it separately.
- Stopping payments under an installment payment agreement or earnings-withhold order while the offer is pending; you must continue them.
- Expecting prior payments to reduce the offer amount; CDTFA considers them in evaluating the offer but does not credit them toward it.
- Submitting an incomplete application, which can make the review take longer than the 30-day target.
- Having someone else pay your deposit without their written approval if you may want it applied to your liability after a denial.
Frequently asked questions
What is Pub 56 from CDTFA?
Pub 56 is the CDTFA brochure titled Offer in Compromise (April 2024). It explains the program for people and businesses that cannot pay a tax or fee liability in full, including who may offer, how offers are evaluated and the final steps. It is not the application itself.
Which form do I use to apply for an offer in compromise with CDTFA?
Use CDTFA-490 if you are an individual, or CDTFA-490-C for all others. Spanish versions are CDTFA-490-S and CDTFA-490-C-S. Submit the application with the supporting documentation it describes to your local CDTFA office or the division that handled your account.
Do I send a payment with my offer in compromise?
No. The brochure says not to submit any payment with your offer. If the OIC Section recommends acceptance, CDTFA writes to you and asks you to pay the full amount you proposed; a payment made in one sum is held as a deposit until management completes its final review.
How long does CDTFA take to answer an offer in compromise?
CDTFA sends an acknowledgment letter after receiving your application and will do its best to make a recommendation within 30 days of receiving a completed application. It can take longer if your account is complex, the application is incomplete or CDTFA needs more information.
Can I pay my accepted offer in installments?
Possibly. Depending on your situation, and at CDTFA's discretion, an installment payment agreement may be set up. The full amount offered must be paid within 12 months.
Can I make an offer in compromise if my business is still open?
Possibly, until January 1, 2028. Effective January 1, 2009, CDTFA also considers offers from open and active businesses that have not received reimbursement for the taxes, fees or surcharges owed. Call the OIC Section at 1-916-322-7931 to find out if you are eligible.
What happens to my deposit if CDTFA denies my offer?
In most cases CDTFA returns the deposit without interest, at your request, or you can choose to apply it to your liability, with the deposit date counting as the payment date. Deposits cannot be returned in cases of fraud or asset concealment.
Can I view and download Pub 56 on FillingPDF?
Yes. FillingPDF lets you view and download the official Pub 56 PDF. It is an independent service, not affiliated with CDTFA, and does not file offers; you apply through CDTFA's own channels.
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