§ 105-237.1. Compromise of liability. - North Carolina Statutes

§ 105‑237.1.  Compromiseof liability.

(a)        Authority. – TheSecretary may compromise a taxpayer's liability for a tax that is collectibleunder G.S. 105‑241.22 when the Secretary determines that the compromiseis in the best interest of the State and makes one or more of the followingfindings:

(1)        There is areasonable doubt as to the amount of the liability of the taxpayer under thelaw and the facts.

(2)        The taxpayer isinsolvent and the Secretary probably could not otherwise collect an amountequal to or in excess of the amount offered in compromise. A taxpayer isconsidered insolvent only in one of the following circumstances:

a.         It is plain andindisputable that the taxpayer is clearly insolvent and will remain so in thereasonable future.

b.         The taxpayer hasbeen determined to be insolvent in a judicial proceeding.

(3)        Collection of agreater amount than that offered in compromise is improbable, and the funds ora substantial portion of the funds offered in the settlement come from sourcesfrom which the Secretary could not otherwise collect.

(4)        A federal taxassessment arising out of the same facts has been compromised with the federalgovernment on the same or a similar basis as that proposed to the State and theSecretary could probably not collect an amount equal to or in excess of thatoffered in compromise.

(5)        Collection of agreater amount than that offered in compromise would produce an unjust resultunder the circumstances.

(b)        Written Statement.– When the Secretary compromises a tax liability under this section and theamount of the liability is at least one thousand dollars ($1,000), theSecretary must make a written statement that sets out the amount of theliability, the amount accepted under the compromise, a summary of the factsconcerning the liability, and the findings on which the compromise is based.The Secretary must sign the statement and keep a record of the statement. Ifthe compromise settles a dispute that is in litigation, the Secretary mustobtain the approval of the Attorney General before accepting the compromise,and the Attorney General must sign the statement describing the compromise.  (1957, c. 1340, s. 10; 1959,c. 1259, s. 8; 1973, c. 476, s. 193; 1985, c. 114, s. 11; 1991 (Reg. Sess.,1992), c. 1007, s. 11; 2008‑107, s. 28.16(f).)