Proposing a Settlement

The California State Board of Equalization’s(Board)settlement program allows a taxpayer, who is pursuing a sales and use tax appeal with the Board, to propose a settlement offer. The best reasons to enter into a settlement with the Board is to either reduce the tax liability and/or to pay back the liability with using a monthly payment plan. To begin the settlement process, you must first submit your request in writing outlining your proposal. The Board will either accept a letter or you may use the Board’s form BOE-393 (see attached copy). The settlement proposal must include your name, address, phone number, seller’s permit number, the tax owed and the tax period involved, and an outline which states the factual and legal grounds in support of the offer. The proposal is then mailed to:

State Board of Equalization
Settlement Section (MIC:87)
420 N Street
Post Office Box 942879
Sacramento, CA 94279-0087

Please note, the settlement program does not consider collection or litigation cases. Also, if you have requested a Board Hearing (which you should always do), your proposal must be submitted at least 45 days before the Board Hearing date. Important note, if you request a postponement of your Board Hearing, you will forfeit your right to a settlement proposal.

Board’s Review of Proposal

Once the Board has received your proposal, it will be reviewed for any factual disputes. If your case is accepted, the Board may accept your offer or seek to negotiate a different amount. Once an agreement on the settlement amount is negotiated, the Board will send you a formal document called a Settlement Agreement (Agreement). The Agreement outlines the terms and conditions of the settlement. If you accept the terms of the Agreement you will sign, date and return it to the Board. The Agreement will then be forwarded to the Attorney General’s office, who has 30 days to review and respond. The Agreement is then submitted to the Members of the Board for approval. Note: you may be required to pay the full settlement amount before the Agreement is submitted to the Board Members for approval.

If an agreement between you and the Board staff cannot be reached, you may appeal to the Board’s Assistant Chief Counsel. If no agreement can be reached, the settlement process ends and your case will continue through the normal appeals process.

Please note, even if you have signed the Agreement, you may cancel your Agreement at any time.

Proposal Approved

If the Board Members accept the Agreement and the reduction of tax exceeds $500.00, certain information about the Agreement will become a matter of public record. This information will be available for review in the office of the Board’s Executive Director. The public record includes the name of the taxpayers who are parties in the Agreement, the amount in dispute, the amount agreed on in the settlement, a summary of the reasons the settlement is in the best interest of the State, and the Attorney General’s conclusion regarding the reasonableness of the settlement.