SACRAMENTO >> Governor Brown signed into law Assemblymember Cecilia Aguiar-Curry’s (D — Winters) bill, AB 525. This bill extends the state’s authority to operate the “Offer in Compromise” program. In the event a business owner can’t afford to pay an unanticipated tax liability, this program allows the taxpayer to pay the maximum amount feasible — a compromised offer — and continue to stay in business.
“The tax code is not easy to understand and mistakes happen, especially in smaller businesses with fewer resources to ensure they are filing correctly. It is not uncommon for a business to incur a tax liability they didn’t realize they would be responsible for paying,” said Aguiar-Curry. “The Offer in Compromise program helps those businesses keep their doors open by letting them pay a compromised amount and avoid bankruptcy. It’s a good government program. I’m proud to say my bill, AB 525, will allow this program to continue.”
According to the Board of Equalization, the Offer in Compromise program is an important tool the state uses to resolve difficult tax collection cases. It boosts the economy, protects small businesses from closure, and has collected more than $14 million in back taxes since 2009. This revenue is relied on and budgeted for by state and local governments. Had those businesses been forced into bankruptcy, this money would have been foregone.
“We are pleased with the passage of AB 525, authored by Assemblymember Aguiar-Curry, as it will provide a critically important option for small business owners facing burdensome tax bills. The Offer in Compromise program is an important tool to small business owners struggling to pay their taxes, and we are pleased to see the sunset extended five years,” commented Tom Scott, State Executive Director of the National Federation of Independent Businesses California, representing 22,000 dues-paying small business owners across the state.
AB 525 passed through the Legislature with overwhelming bipartisan support before it was signed by Governor Brown. This marks the fourth bill authored by Aguiar-Curry to be signed into law, and she has ten more currently awaiting action.
