| If you were to ask people what three letters of the | | | | An OIC may be had for several reasons. You will |
| alphabet they most feared, chances are you would | | | | need to be able to fully document your case and |
| hear IRS. The Internal Revenue Service gives most | | | | convince the IRS that this is the only way they will |
| people nightmares if they think they must deal with this | | | | ever get any money from you. One way to receive |
| agency. However, you will not make your bad dream | | | | the OIC is to show that even if all of your assets are |
| go away by merely ignoring the problem. You must | | | | liquidated, you still will not be able to pay the amount of |
| face it head on and be prepared with the knowledge | | | | taxes that are due. Another way is to prove that you |
| ahead of time so that you can fight for your case. | | | | have a catastrophic situation, such as an illness that |
| If you are afraid that you might owe back taxes, the | | | | requires out-of-pocket medical expenses and will |
| first step to take is to contact the IRS and try to make | | | | prevent you from working. Remember though, that the |
| arrangements to pay. Because they want your | | | | IRS requires meticulous documentation before it will |
| money, they are usually willing to work out a payment | | | | award this status to your loan. |
| schedule with you. However, you need to know that | | | | The IRS may also give you the status of CNC which |
| your penalties and interest will continue to build until the | | | | stands for Currently Not Collectable. This means that |
| tax is paid in full. So it does make sense to make as | | | | for whatever reason you are not able to pay the |
| large of payment as possible. Sometimes it may even | | | | owed taxes at this time. You will continue to mount |
| be to your advantage to charge the tax because your | | | | interest and late penalties however and once your |
| credit card interest rate may end up being lower than | | | | financial status improves, you will be expected to pay |
| the penalties and interest charged by the IRS. | | | | the bill. You may have this particular status for up to 10 |
| The other option is to file an OIC, which is an Offer in | | | | years. At the end of that time if you are still unable to |
| Compromise. These are hard to come by and it is | | | | pay, then your tax will be wiped clean. |
| important that you arm yourself with the facts before | | | | The most important thing to remember is that you |
| you even attempt to obtain this. In fact, you will more | | | | must act. Your back or owed taxes will catch up to |
| than likely need the guidance and expertise of a tax | | | | you and you are in a better negotiating position if you |
| attorney or other professional. | | | | take the initiative and act first. |