OFFER IN COMPROMISE:
An Offer in Compromise (OIC) is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS will not accept an offer if the taxpayer has the ability to pay the tax liability in full as a lump sum or through a payment agreement. The process of an Offer in Compromise can be very complex and time consuming. Some offers have taken as little as five months while others can sometimes take years before they are finally approved by the IRS.
The Office in Compromise is a win-win situation for all involved because it is a method of settling tax amounts owed to the IRS for less than the original tax liability. The taxpayer can finally feel relief that his/her tax burden has been lifted and the IRS can feel satisfied because they have received revenue that they normally would not have received. Also, the taxpayer is more likely to stay in compliance when it comes to filing and paying future taxes as part of the condition of the Offer in Compromise agreement.