General Questions

An Offer in Compromise is a Settlement of tax debt between you (the taxpayer) and the Internal Revenue Service (IRS), for less than the full balance owed.

Someone who qualifies for an OIC would have to meet the IRS Low Income Certification Guidelines as well as have a financial hardship which will not change for quite some time.
The amount of the Offer in Compromise would be based on what the IRS considers to be your ability to pay.
To begin the process, all tax returns must be filed in accordance with the IRS. Gathering all your financial information is crucial in the process of filing for an OIC. It will let the IRS know what types of liabilities that you have, and what you could afford to pay. All payments to the IRS must be current for a year. There are two different options to choose from, and depending on what payment options you pick you must send in an initial payment of the offer along with the application, and then the IRS will review the application and make their decision. More than likely a Lien will be put against you while OIC is pending. Once OIC is accepted you may not have any balances on any future tax returns for the next 5 years, if you do it must be paid in full if. Failure to pay means your OIC will be considered defaulted and all penalties, interests, & fees will be reinstated. One thing that should be noted is the Federal Government and States are two separate entities and will evaluate their own OIC’s individually.
Collections that the IRS has against you will be suspended, however penalties and interest will continue to incur.

Other Questions

Depending on the complexity of each case will determine the length of time that it will take to process a request. This process usually takes about 90 days after a specialist is assigned to the file, it could be in excess of 90 days, possibly up to a year. Submitting an offer application does not ensure that the IRS will accept your offer.

There are 2 options for payments:
  • Lump Sum Cash: must pay 20% of offer along with the application and then pay the remaining balances within 5 or fewer payments.
  • Periodic Payments: must make an initial payment along with the application then you can make the remaining payments within the next 24 months. However, during the evaluation period, the IRS will expect you to continue to make all subsequent payments in good faith, while the IRS is evaluating your offer. Failure to make these payments will cause your offer to be returned.
You must be prepared to have funds available within the month of offer being accepted.


Business Hours

  • Monday-Friday: 9am to 5pm PSD
  • Saturday: 11am to 3pm
  • Sunday: Closed