                                 CODE OF VIRGINIA

OFFERS IN COMPROMISE; DEPARTMENT MAY ACCEPT; AUTHORITY AND DUTY OF TAX
COMMISSIONER (§ 58.1-105)

A. In all cases in which under the laws of this Commonwealth a prosecution is
authorized for violation of the revenue laws and in all cases in which a penalty
is imposed upon the taxpayer for failure to comply with the requirements of the
tax laws, the Department shall in its discretion have authority to accept offers
made in compromise of such prosecution and in compromise or in lieu of such
penalties. An offer in lieu of the assessment of a penalty shall be deemed to be
made by the filing of a return or payment of tax without payment of a penalty if
information filed with the return or payment of tax or obtained from other
sources demonstrates reasonable cause for the failure or omission for which the
penalty would be imposed. The reason for the acceptance of such offers in
compromise shall be preserved among the records of the Department.

B. The Tax Commissioner may compromise and settle doubtful or disputed claims
for taxes or tax liability of doubtful collectibility. An offer in compromise
shall be deemed accepted only when the taxpayer is notified in writing of the
acceptance by the Tax Commissioner. Whenever such a compromise and settlement is
made, the Tax Commissioner shall make a complete record of the case showing the
tax assessed, recommendations, reports and audits of departmental personnel, if
any, the taxpayer&#8217;s grounds for dispute or contest together with all
evidences thereof, and the amounts, conditions and settlement or compromise of
same.

C. The Department may deposit into the state treasury all payments submitted
with offers in compromise, unless the taxpayer specifically and clearly directs
otherwise.

HISTORY: Code 1950, § 58-45; 1973, c. 446; 1984, c. 675; 1994, c. 800; 1996,
cc. 640, 655.