                                 CODE OF VIRGINIA

OFFERS IN COMPROMISE WITH RESPECT TO LOCAL TAXES (§ 58.1-3994)

A. Notwithstanding any other provision of law, the commissioner of the revenue
or other official responsible for the assessment of any local tax appealed
pursuant to &#xA7; 58.1-3703.1 or &#xA7; 58.1-3983.1 may, in his sole
discretion, compromise and settle any disputed assessment of taxes prior to the
time that such assessment is no longer subject to administrative or judicial
review pursuant to applicable law if the commissioner or other official
responsible for assessment determines that there is substantial doubt under
applicable law, regulations, or guidelines as to the taxpayer&#8217;s liability
for such taxes.

B. Notwithstanding any other provision of law, the treasurer or other official
responsible for the collection of any local tax imposed pursuant to this title
may, with the consent of the governing body or its designee, compromise and
settle the amount due and payable when the treasurer or other official
determines that the collection of the entire amount due and owing is in
substantial doubt and the best interests of the locality will be served by such
compromise. Whenever a tax otherwise due and owing is compromised pursuant to
the provisions of this subsection, the difference between the amount of tax then
due and owing, and the amount of tax paid pursuant to such compromise, shall be
treated for the purposes of &#xA7; 58.1-3921 in the same fashion as a tax
rendered legally uncollectible by reason of the application of the United States
Bankruptcy Code.

C. Any offer in compromise submitted to an official responsible for the
assessment or collection of local taxes shall be made in writing and shall be
deemed accepted only when the taxpayer is notified in writing of the acceptance
by the responsible official.

D. Whenever a compromise and settlement is made pursuant to the provisions of
this section, the responsible official shall make a complete record of the case,
including: (i) the tax assessed; (ii) audit findings, if any; (iii) the
taxpayer&#8217;s grounds for dispute or contest together with all evidences
thereof; (iv) factors calling collectibility into substantial doubt; (v) any
nonprivileged reports or recommendations made with respect to the liability of
the taxpayer, the requirements of effective tax administration considered,
and/or the collectibility of taxes due; and (vi) the amount assessed or accepted
and the terms and conditions attendant to settlement or compromise, with respect
to the liability in question.

E. The treasurer or other official charged with collection of taxes may deposit
into the treasury of the county, city or town any and all payments submitted
with offers in compromise, unless the taxpayer specifically, clearly and
conspicuously directs otherwise in writing at the time the offer in compromise
is submitted to the responsible official. For the purposes of this subsection,
no restrictive endorsement or other notation upon a check or other payment
instrument shall constitute clear and conspicuous notice of a direction not to
deposit.

F. Upon acceptance of an offer in compromise by the responsible local official
with respect to a tax liability, the matter thereafter may not be reopened
except upon a showing of fraud, malfeasance or misrepresentation of a material
fact.

HISTORY: 2004, c. 526.