Anyone with a tax obligation who believes his or her tax obligation can never be paid in full may petition the department to settle his or her account for an amount less than the total liability. The petitioner may be an individual, corporation, partnership, limited liability company, or any other legal entity with a tax obligation. The filing of a Form
A-212, Petition for Compromise of Taxes, can be downloaded from www.revenue.wi.gov/forms/misc/a-212.pdf and common questions and answers are found at Petition for Compromise of Taxes. Publication 124 also provides additional information www.revenue.wi.gov/pubs/pb124.pdf.
In addition to the compromise authority based on inability to pay described above, the department may also compromise tax obligations utilizing authorities described below.
Reduction of Interest
References: Sections 71.82(2)(b) and 71.82(2)(d), Wis. Stats.
This compromise option allows for a taxpayer to request a reduction of interest for delinquent liabilities from 18% to 12%. The request for interest reduction must be in writing, and the taxpayer must indicate why it is fair and equitable for the rate of interest to be reduced. In addition, the taxpayer must be current in all returns, report filings and payments for all matters other than the delinquencies for which the interest reduction is being sought, and the reduced amount due must be paid in full within 30 days of receiving notice of reduction.
During the determination, any collection actions that were previously initiated will remain in place. Additional collection actions will not be taken during the determination.
Several factors are used in determining whether an interest reduction is fair and equitable.
- Taxpayer's prior record of reporting and payment to the department.
- Taxpayer's financial condition.
- Any unusual circumstances which may have caused the taxpayer to incur the delinquency or prevent its payment.
The determination is NOT subject to appeal by the taxpayer.
The request should be sent to:
Wisconsin Department of Revenue
PO Box 8901
Madison, WI 53708-8901
References: Sections 71.92(2) and 77.62(4), Wis. Stats.
This compromise option allows a taxpayer to enter into an installment arrangement plan acceptable to the Department of Revenue and taxpayer, which will pay the taxpayer's delinquent account(s).
See Payment of Taxes for further information on requesting an installment agreement.
Fair and Equitable Adjustments
References: Section 71.92(4) and 77.62(6)
This option allows the Department to compromise certain types of income, franchise or sales tax obligations subject to a fair and equitable compromise. A few examples of fair and equitable adjustments include: the adjustment of a departmentally issued estimate to actual liability per a return filing; the waiver of a late filing fee if evidence is provided substantiating timely filing and a compliant filing history exists; and the wavier of all or a portion of negligence penalty based on mitigating circumstances detailed by the taxpayer.
A taxpayer may contact their assigned agent or local department office to discuss this option.
February 7, 2008