| 1. What is an Offer in Compromise? | | | | For more information about who qualifies as a low |
| An OIC is an IRS tax resolution program that allows a | | | | income taxpayer, check out this page on the IRS’ |
| taxpayer to settle their IRS back tax liability by paying | | | | website . |
| less than they owe. The amount of a taxpayer’s | | | | 5. Will an Offer in Compromise remove a wage |
| needs to pay will vary depending on the taxpayer’s | | | | garnishment or bank levy? |
| unique financial situation, as well as his or her original | | | | Having an OIC accepted will not automatically remove |
| liability amount. However, it is usually significantly less | | | | a wage garnishment or bank levy. However, an |
| than the tax debt owed. The IRS will only accept a | | | | accepted OIC will resolve your tax liability with the IRS |
| taxpayer’s OIC if it is equal to or greater than the | | | | so that you can request to have your garnishment or |
| reasonable collection potential, which is the IRS’s | | | | levy released. |
| measurement of the taxpayer’s ability to pay their | | | | 6. How long does it take for the IRS to decide on an |
| debt. Most taxpayer’s will not qualify for this | | | | Offer in Compromise? |
| program. | | | | It can take the IRS several months to review your OIC. |
| 2. What fees will I have to pay when I submit my OIC? | | | | Additionally, once the IRS performs an initial review, |
| You will need to pay a $150.00 application fee, as well | | | | they may have questions or require clarification from |
| as a check or money order for 20% of the lump sump | | | | you regarding some of the representations that were |
| offer. | | | | made in the OIC. As such, there is really no way to tell |
| 3. What will happen if I submit my offer without the | | | | how long it will take for the IRS to respond to your |
| 20% payment? | | | | OIC. |
| If you submit your offer without the 20% payment, | | | | 7. What if my Offer in Compromise is rejected? |
| then the IRS will reject your offer as not processable, | | | | If your OIC is rejected, you still have other options to |
| and will return your OIC and $150.00 application fee | | | | resolve your tax debt. You might qualify for placement |
| back to you. | | | | into Currently Not Collectible status, which would |
| 4. Is there any way to submit my offer without the | | | | essentially end all IRS collection activity on your |
| application fee or 20% payment? | | | | account unless your financial situation changes. Or, you |
| Yes, the IRS will allow you to submit an offer without | | | | might qualify for an Installment Agreement that would |
| the $150.00 application fee or the 20% payment if you | | | | allow you to pay off your tax debt through |
| meet the IRS’s low-income taxpayer requirements. | | | | manageable monthly payments. |