If you’re dealing with an insurmountable amount of tax debt, it can seem impossible to escape from it. However, there may be a way out – the IRS Offer in Compromise (OIC). In this article, we’ll explain what exactly an OIC is and how it could help you get the tax debt relief you need.
Introduction to IRS Offer in Compromise (OIC)
The IRS will review the information provided and determine if the taxpayer qualifies for an OIC. If the taxpayer does qualify, they will be required to enter into a payment agreement with the IRS. The terms of the agreement will be based on the taxpayer’s ability to pay, and will require the taxpayer to make regular payments until the debt is paid in full.
What are the Benefits of an OIC?
The Offer in Compromise (OIC) program is the Internal Revenue Service’s (IRS) primary means of providing tax debt relief to eligible taxpayers. An OIC may be an attractive option for you if you can’t pay your full tax liability, or if doing so creates a financial hardship.
If the IRS accepts your offer, it will send you a Notice of Acceptance reflecting the terms of the settlement. Once you make all required payments under the agreement, your case will be closed and the remaining tax debt will be forgiven.
The main benefit of an OIC is that it can significantly reduce the amount of taxes you owe. This can provide much-needed relief if you’re struggling to pay your taxes in full. Additionally, an OIC can help resolve your tax debt more quickly than other methods, such as a payment plan or Currently Non-Collectible status.
If you’re considering an OIC, it’s important to understand the process and what to expect. The following sections provide more information on how to apply for an OIC and what happens if your offer is accepted or rejected.
Who is Eligible for an OIC?
The IRS will consider an Offer in Compromise (OIC) from any taxpayer, regardless of income, who cannot pay their full tax liability. In general, the IRS is more likely to accept an OIC from a taxpayer who:
– Has experienced a significant financial hardship
– Owes a relatively small amount of money
– Has already made attempts to pay their debt
– Can pay the amount offered within a reasonable period of time
– File all required tax returns
– Be current on all filing and payment requirements
– Make all required estimated tax payments for the current year
– Have made all required federal tax deposits for the current quarter if you are self-employed or have employees.