The Offer in Compromise, also known as OIC, is a program that allows a taxpayer to settle their delinquent taxes for less than the total amount the IRS and/or State Taxing Agency claims they owe.
The Offer in Compromise is the most commonly used of all tax resolution programs. And more recently, new OIC guidelines have given even more opportunities to those who previously did not qualify for an OIC under previous program guidelines. These guidelines, when correctly applied, result in taxpayers reaching favorable settlements. If these guidelines are not applied properly, a taxpayer’s OIC may be rejected or, even worse, the taxpayer may overpay. Hence, why it’s extremely important and beneficial to have a TOP tax professional manage your case.
Offer in Compromise Programs
Doubt as to Collectability
A Doubt as to Collectability Offer in Compromise is negotiated on the basis of a taxpayer’s inability to pay and takes into account the taxpayer’s current financial position including the taxpayer’s equity in assets.
Doubt as to Liability
A Doubt as to Liability Offer in Compromise allows taxpayers that do not agree that they owe the tax or feel that the tax has been incorrectly calculated, an opportunity to have their tax liabilities reconsidered.
Effective Tax Administration
Effective Tax Administration Offer in Compromise is negotiated when there is no doubt that the tax is legally owed and that the full amount owed can be collected, but requiring payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.
State Taxing Agency Offer in Compromise
The majority of states have OIC programs but some do not. Your Tax Specialist will advise you on whether or not the State where taxes are due, does or doesn’t have OIC programs.