Making an offer in compromise to settle a claim made by U.S. Customs & Border Protection (CBP) can be a great way to try to resolve many “claims” by the government; “claims” can include unpaid duties, penalties and even anti-dumping duties. In fact, sometimes it is the only option – or the only option left – to settle a claim.
An offer in compromise must be written, include payment in settlement of the claim (in most, but not all cases), and must expressly state that it is being made as an “offer in comrpromise” under 19 USC 1617. The law governing an offer in compromise says that a customs officer or U.S. attorney must present a report showing the facts supporting the claim of forfeiture and the probability of recovery and the amount of money being offered (“terms of compromise”) in order for a claim to be compromised.
What is an offer in compromise?
An “offer in compromise” is a request that the Government agree to keep less than the full value of property in exchange for avoiding the expenses of defending a challenge to the forfeiture (either administratively or in court) and the risks that the challenge will be successful.” United States v. Martin, 460 F.Supp.2d 669 (D.Md. 2006). It is, in essence, a settlement agreement. It’s like saying, “You don’t have a good case, but we’ll agree to settle it for a lesser sum of money to avoid a legal battle.”
The offer in compromise is most appropriate in the compromise of a doubtful case or doubtful chance of actual recovery of the full amount of the claim by CBP. This might be because it is not clear that there is liability (i.e., the facts or the law are not in Customs’ favor; they have a bad case), or it is unlikely Customs can recover payment in full (as in the case with a business without enough money to pay a bill).
Can you assist in making an offer in compromise?
Yes, Great Lakes Customs Law would be happy to assist in the evaluation of whether to make an offer in compromise. We can also evaluate the chances of success. Contact us today!