Offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed.
In most cases, the IRS will not accept an OIC unless the amount offered by the taxpayer is equal to or greater than the amount the IRS reasonably expects to be able to collect on its own.
The IRS may accept an offer in compromise based on three grounds: 1-Doubts as to collectibility, 2-Doubts as to Liability 3-Effective tax administration. There is a $150 IRS application fee for an OIC.
The IRS can accept the offer, reject it, or propose a different amount for acceptance. If the offer is accepted, the taxpayer may choose to pay the amount by lump sum payment, or by periodic payments over the short term (24 months) or long term.
Do you have any questions about offer in compromise or the process of reaching an agreement with the the IRS? We are here to help you. The IRS offers multiple payment options and hardship deferment programs.
We will help and guide you to choose one that is right for you. Please call us or stop by one of our convenient locations to schedule a confidential consultation. We will review and analyze your case and help you reach a settlement and agreement with the IRS or other tax agencies.
