Offer in Compromise



OIC-Offer in Compromise

The Offer in Compromise or OIC settle your tax debt for less than the full amount.  This option if you cannot afford to pay your taxes in full is a great way to pay off the tax debt for less with the government. There are very stringent rules to qualify to enter into this program.

OIC Considerations:

Unique facts and circumstances that are considered.  Below are four of those facts:OIC

  • Your ability to pay
  • Income
  • Expenses
  • Equity in assets

Facts considered when you submit your offer.  You will need to look at other payment options that the IRS will accept.

The IRS generally approve an offer in compromise when the amount offered represents the most they can expect to collect within a reasonable period of time.  You should consider all other payment options before submitting an offer.  You should know that this program is not for everyone.

Are You Eligible For the OIC

Recent 6-years of tax return required to be filed.  All self-employed individuals must have made all required estimated tax payments for the current year.  You are not eligible for the offer in compromise if you are in an open bankruptcy proceeding.  The IRS suggest you use the Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.

Submitting Your OIC

A step-by-step instruction with all forms for submitting an offer can be located in the Offer in Compromise Booklet, Form 656-B.  The complete offer package will include:

  • Form 433-A (OIC) (individuals) or 433-B (OIC) (Business) and all required documentation as specified on the form
  • Form 656-individual and business tax debt (Corporation/LLC/Partnership) submitted on separate Form 656
  • $205 application fee (non-refundable)
  • Initial payment (non-refundable) for each 565

Select a Payment Option

The initial payment will vary based on your offer and the payment option you choose:

  • Lump Sum Cash:  Submit an initial payment of 20% of the total offer amount with your application.  A written confirmation received on acceptance.  The remaining balance due on the offer is paid in five or fewer payments.
  • Periodic Payment:  Submit your initial payment with your application.  Continue to pay the remaining balance in monthly installments while the IRS considers your offer.  Once accepted, continue paying monthly until paid in full.

We are able to assist you with your Offer In Compromise or other payment arrangement you may not have consider in your best interest.  Contact us today for a consultation.