Offer In Compromise Explained

Imagine finding an envelope from the IRS in your mail. Your heart races as you open it, fearing bad news. Inside, you find a big tax bill you can't pay. This starts a wave of stress about how to deal with IRS debt.

But there's hope, so don't panic. The IRS has a program that might help. It's called an Offer In Compromise. This can let you settle your tax debt for less than you owe if you qualify.

"Discover Your Eligibility for An Offer In Compromise: Schedule Your Tax Diagnosis and Case Analysis Today!"


In the tax world, an Offer In Compromise (OIC) is like a golden ticket.

FAQ’s

  • An Offer in Compromise (OIC) is a program offered by the IRS that allows qualified individuals with unpaid tax debt to negotiate a settled amount that is less than the total owed to clear the debt.

  • The best way to understand if you qualify is by contacting us for a Tax Diagnosis and Case Analysis. Our experts will closely evaluate your tax situation to determine if you are a suitable candidate for an Offer in Compromise. To get started on this process and see if you qualify, please contact us today.

  • To apply for an OIC, submit the following to the IRS:

    The completed IRS Form 656, Offer in Compromise

    The completed IRS Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals, and/or Form 433-B (OIC), Collection Information Statement for Businesses

    Supporting documentation as required

    The application fee and initial payment (if applicable)

  • As of the latest update, there is a $205 application fee for an Offer in Compromise. Low-income taxpayers may qualify for a waiver of this fee. In addition, you must make an initial payment as part of your offer, which varies based on your chosen payment option.

  • The process can take anywhere from 4 months to a year, depending on the complexity of your case and how quickly you're able to provide the necessary documentation.

  • The IRS considers several factors, including your ability to pay, income, expenses, and asset equity. They look to see if the offered amount is the most they can expect to collect within a reasonable period of time.

  • Yes, there are two payment options for an OIC:

    Lump Sum Cash: Payable in 5 or fewer installments within 5 months after acceptance.

    Periodic Payment: Payable in 6 or more monthly installments within the remaining statutory period for collecting the tax.

  • Yes, filing an Offer in Compromise generally stops collection actions. However, the IRS may still file a Notice of Federal Tax Lien to protect its interest in any potential tax collection.

  • Yes, an Offer in Compromise settles your tax debt for less than the amount you owe, while a Payment Plan (or Installment Agreement) allows you to pay your debt over time in manageable amounts without reducing the total balance owed.

At Long Island Tax Solution

We're all about making life easier for you. We've got the know-how, the experience, and the dedication to guide you through this process.

We roll up our sleeves and dissect your financial situation.
Uncovering every possible opportunity to reduce your tax debt.

Our aim? To get you that golden ticket.