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Offer in Compromise (OIC) Make a Settlement Offer ExpressTaxRelief.Com

Offer In Compromise, Tax Debt Negotiation.

The Offer in Compromise (or OIC) Tax Debt Negotiation program, in the United States, is an Internal Revenue Service (IRS) program under 26 U.S.C. 7122 which allows qualified individuals with an unpaid tax debt to negotiate a settled amount that is less than the total owed to clear the debt.

A taxpayer uses the checklist in the Form 656, Offer in Compromise, package to determine if the taxpayer is eligible for the offer in compromise program.

The objective of the OIC program is to accept a compromise when acceptance is in the best interests of both the taxpayer and the government and promotes voluntary compliance with all future payment and filing requirements.

Qualifying conditions

At least one of three conditions must be met to qualify a taxpayer for consideration of an OIC settlement:

  • Doubt as to Liability Debtor can show reason for doubt that the assessed tax liability is correct
  • Doubt as to Collectability Debtor can show that the debt is likely uncollectable in full by the IRS under any circumstances
  • Effective Tax Administration Debtor does not contest liability or collectability but can demonstrate extenuating or special circumstances that the collection of the debt would "create an economic hardship or would be unfair and inequitable."

This Offer in Compromise program is available for any taxpayer, but is primarily used by individuals that are elderly, disabled, or have special extenuating circumstances.

In 2006, only one Offer in Compromise was accepted the entire year by the Internal Revenue Service.

Lowest acceptable offer

The above formula may be applicable in cases where you owe a very large sum and you have a significant amount of disposable income. However, "doubt as to collectability" implies the inability to pay. The IRS has been known to accept offers in compromise as low as 10%, 1%, and $1 (One Dollar), but this is, as you can imagine, very rare.

If your disposable income is $0, you do not expect to have disposable income for some years, you have special circumstances, you have zero assets and if paying this debt would cause a hardship, the IRS has been known to accept ONE DOLLAR to settle your tax liability through the Offer In Compromise. Said provision takes effect 60 days after the signing.

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