An Act To Conform the State Compromise of Tax Liability Procedure with Federal Procedures
Maine Legislature, Session 121, LD 1209
Committee: Taxation
Sponsors: McLAUGHLIN, HALL, BOWLES, LERMAN, MILLS, SUSLOVIC
Amends: 36 MRSA §143

Legislative Document 
No. 1209 
H.P.883 
House of Representatives, March 6, 2003 
An Act To Conform the State Compromise of Tax Liability 
Procedure with Federal Procedures 
Reference to the Committee on Taxation suggested and ordered printed. 
II'/~/h.~ 
MILLICENT M. MacFARLAND 
Clerk 
Presented by Representative McLAUGHLIN of Cape Elizabeth. 
Cosponsored by Senator HALL of Lincoln and 
Representatives: BOWLES of Sanford, LERMAN of Augusta, MILLS of Farmington, MILLS 
of Cornville, SUSLOVIC of Portland. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 36 MRSA §143. as amended by PL 1999, c. 708, §7, is 
repealed and the following enacted in its place: 
§143. Compromise of tax liability and action 
1. 
Authorization. 
The 
assessor 
may 
compromise 
a 
tax 
liability of any civil or criminal case arising under this Title 
prior 
to 
reference 
to 
the 
Attorney 
General's 
office 
for 
prosecution or defense, as specified in this section. 
z. 
Statement. 
If a 
compromise is made by the assessor 
pursuant to this section, there must be available in the bureau a 
statement containing: 
A. 
The opinion of the general counsel for the bureau or the 
general counsel's designee explaining the reason for the 
compromise: 
B. The amount of tax assessed; 
c. 
The amount of interest, any additional amount, addition 
to the tax or any assessable penalty imposed by law on the 
person against whom the tax is assessed; and 
D. 
The amount actually paid in accordance with the terms of 
the compromise. 
The opinion of the general counsel of the bureau explaining the 
reason for the compromise under paragraph A is not reguired for 
the compromise of any civil case in which the unpaid amount of 
tax assessed, 
including any interest, 
any additional 
amount, 
addition to the tax or 
any assessable penalty, is less than 
$50,000. 
However, 
such compromises are subject to continuing 
guality review by the assessor. 
3. 
Standards for evaluation of offers. 
The assessor shall 
prescribe guidelines, 
procedures 
and 
forms 
for 
officers 
and 
employees 
of 
the 
bureau 
to 
determine 
whether 
an 
offer 
in 
compromise is adeguate 
and 
should be 
accepted to 
resolve 
a 
dispute. 
A. 
The guidelines must establish m~n~mum residual amounts 
that ensure that a taxpayer entering into a compromise has 
an adequate means to provide for basic living expenses. 
In 
establishing guidelines under this paragraph, the assessor 
shall develop and publish schedules of local allowances for 
basic 
living expenses. 
The 
assessor 
may 
use 
schedules 
similar to those published by the Internal Revenue Service. 
Page l-LR1335(1) 
B. 
The guidelines must require officers and employees of 
the bureau to determine, 
on the basis of the facts and 
circumstances of each taxpayer, 
whether 
the 
use of 
the 
schedules 
under 
paragraph 
A is 
appropriate. 
If it is 
determined that the schedule 
amount would result in the 
taxpayer not having adequate means 
to provide for basic 
living expenses, the officer or employee shall disregard the 
schedule. 
C. 
The guidelines under this subsection must also specify 
that: 
4. 
( 1) 
An officer or employee of the bureau may not 
reject 
an 
offer 
in 
compromise 
from 
a 
low-income 
taxpayer solely on the basis of the amount of the 
offer; and 
(2) 
In the case of an offer in compromise that relates 
only to issues of liability of the taxpayer: 
(a) 
The offer may not be rejected solely because 
the assessor is unable to locate the taxpayer's 
return or return information for verification of 
liability; and 
(b) 
The taxpayer may not be required to provide a 
financial statement. 
Administrative review. 
The 
assessor shall establish 
procedures that: 
A. 
Provide for an independent administrative review of any 
rejection of an offer in compromise or installment agreement 
proposal made by a taxpayer under this section before that 
rejection is communicated to the taxpayer; and 
B. 
Allow a taxpayer to appeal any rejection of an offer or 
agreement pursuant to paragraph A to the Superior Court in 
the county in which the person owing the tax resides or is 
located. 
s. 
Attorney General 
compromise. 
After 
reference 
of 
a 
criminal or civil action arising under this Title to the Attorney 
General for prosecution or defense, 
the Attorney General 
may 
compromise 
the 
tax 
liability associated with that civil 
or 
criminal case. 
• 
RUlemaking. 
The assessor shall adopt rules regarding 
the 
procedures 
to 
be 
followed 
for 
the 
submission 
and 
consideration of offers in compromise. 
Rules adopted pursuant to 
this subsection are major substantive rules as defined in Title 
5, chapter 375, subchapter 2-A. 
SUMMARY 
This bill replaces the current law regarding the ability of 
the State Tax Assessor to compromise a tax liability. 
This bill: 
1. 
Allows the assessor to compromise any tax liability; 
2. 
Requires the general counsel for the Bureau of Revenue 
Services to 
review and explain the 
reason for 
the offer of 
compromise if the amount owed, including interest and other added 
amounts, is at least $50,000; 
3. 
Requires the assessor to maintain a report showing the 
specifics of the compromise, 
including the amount assessed and 
the amount actually paid under the compromise; 
4. 
Requires the assessor to establish guidelines to be used 
by officers and employees of the bureau in determining whether to 
grant offers in compromise and the amount that must be retained 
by the 
taxpayer making the offer in compromise 
in order to 
provide for basic living expenses; and 
5. 
Allows 
the 
Attorney 
General 
to 
compromise 
the 
tax 
liability of any civil or criminal case that is referred to the 
Attorney General for prosecution or defense.