Offer In Compromise


Taxpayers, who meet the eligibility criteria, are able to settle their tax liability with the IRS for less than the full amount owed under Offer in Compromise (OIC). The IRS considers OIC on the following grounds:

1. When there is a Doubt as to liability and there is a disagreement with regard to the amount owed.

2. When there is a Doubt as to Collectibility and the taxpayer is unable to pay the full amount of tax owed based on their financial circumstances.

3. To promote Effective Tax Administration where there is no doubt as to the liability or collectibility but special circumstances may affect the taxpayers ability to pay such inability to work, sickness or advanced age.

The payment for an OIC can be made as -

  • A lump sum cash offer in which the offer amount is to be paid in full in five or fewer installments from the date the offer is accepted. Taxpayer must pay 20% of the total amount of the offer with the application. 
  • A periodic payment offer in which the offer amount is to paid in full in six to 24 months from the date the offer is accepted. The first payment is due with the application. Failure to make monthly payments will result in offer being returned without appeal rights

A taxpayer is required to continue filing all the required tax returns in a timely manner and pay the amount owed including estimated taxes while the offer is being considered. Failure to do so will result in offer being returned.

At Tax Relief Central we do a complete financial analysis to determine if you are eligible for offer in compromise . We will also help you stay in compliance by filing all the required tax returns. Give us a call at (602) 904-6535 or schedule a free initial consultation online to see if submitting an offer in compromise is right for you.