What is an offer in compromise?

For taxpayers who owe the IRS, programs are available to settle the tax debt. If you currently owe the IRS but have difficulty paying the total amount or feel overwhelmed by your debts, you may qualify for an OIC.

An OIC is a legitimate offer through the IRS designed to help those who may have financial hardships if they pay their taxes.

Who can apply for an OIC?

Every person who applies for an offer in compromise has unique circumstances. The IRS considers each unique situation but judges based on the individual’s ability to pay, income, expenses and asset equity. Your offer should be the most you can pay within a reasonable amount of time. Those who file all required tax returns make all estimated payments, have a valid extension if applying for the current year and do not have open bankruptcy proceedings, can apply.

How can you apply for an OIC?

To apply for an offer in compromise, go to the IRS’ website to find the appropriate forms. The IRS will supply you with a booklet that you need to follow closely to have your offer accepted. However, filling out the offer in compromise is complex and can be tedious to do on your own. If you make mistakes, the IRS will return your forms to correct any errors or submit further documentation.

You must submit the entire package, including all forms, all required documentation and an application fee. however, if you meet the low-income certification guidelines, you do not have to send in any application fees or initial payments.

If you submit an OIC but receive a rejection, you can appeal the decision within 30 days.