IRS Tax Relief - Offer in Compromise


What You Need to Know

What is an Offer in Compromise?

An Offer in Compromise (OIC) is an agreement between you, the taxpayer, and the IRS that settles a tax debt for less than the full amount owed. The Offer in Compromise program provides eligible taxpayers with a path toward paying off their tax debt and getting a “fresh start.” The ultimate goal is a compromise that suits the best interest of both the taxpayer and the IRS. To be considered, generally, you must make an appropriate offer based on what the IRS considers your true ability to pay. 

Submitting an Offer in Compromise application does not ensure that the IRS will accept your offer. It begins a process of evaluation and verification by the IRS, taking into consideration any special circumstances that might affect your ability to pay. Generally, the IRS will not accept an Offer in Compromise if you can pay your tax debt in full via an installment agreement or a lump sum.

Let an Experienced IRS Tax Lawyer Decide What Your Offer Should Be

Are You Eligible?

The IRS is also expanding a new streamlined Offer in Compromise (OIC) program to cover a larger group of struggling taxpayers with annual incomes up to $100,000 to participate. The IRS has made it easier for your Offer in Compromise to be accepted. The IRS has expanded on their Fresh Start Initiative. 

Before you submit your Offer in Compromise, you must (1) file all tax returns you are legally required to file, (2) make all estimated tax payments for the current year, and (3) make all required federal tax deposits for the current quarter if you are a business owner with employees.

Other in Important Facts:

  1. Penalties and interest will continue to accrue during the offer evaluation process.
  2. You cannot submit an offer that is only for a tax year or tax period that has not been assessed.
  3. A Notice of Federal Tax Lien (lien) gives the IRS a legal claim to your property as security for payment of your tax debt. Generally, if a lien is not already filed, a lien will not be filed during the offer evaluation process. If a lien was filed, it will normally not be released until the payment terms of the accepted offer are satisfied, or the tax debt is paid in full, whichever comes first.
  4. The IRS will keep any refund, including interest, for tax periods extending through the calendar year that the IRS accepts the Offer in Compromise.  For example, if your Offer in Compromise is accepted in 2011 and you file your 2011 Form 1040 showing a refund, IRS will apply your refund to your tax debt.
  5. The IRS may keep any proceeds from a levy served prior to you submitting an Offer. The IRS may levy your assets up to the time that the IRS official signs and accepts your Offer in Compromise as pending.  
  6. If you currently have an approved installment agreement with IRS and are making installment payments, then you may stop making those installment agreement payments when you submit an Offer in Compromise. This will allow you to make your offer payments noted below.  If your offer is returned for any reason, your installment agreement with IRS will be reinstated with no additional fee.
Application Fee

An Offer in Compromise requires a $150.00 application fee. 

EXCEPTION: If you are submitting an individual Offer in Compromise and meet the Low-Income Certification guidelines, you will not be required to send the application fee. 

Payment Options:

Submitting an offer requires the selection of a payment option as well as
sending an initial payment with your application. The amount of the initial payment and subsequent payments will depend on the total amount of your offer
and which of the following payment options you choose. 

Payment Option: 
1: This option requires 20% of the total offer amount to be paid
with the offer and the remaining balance paid in five or fewer payments. 
Payment option 
2: This option requires the first payment with the Offer in Compromise and the
remaining balance paid in accordance with your proposed Offer terms. 
Under this option, you must continue to make all subsequent payments while the IRS is evaluating your Offer in Compromise.  Failure to make these payments will
cause your Offer in Compromise to be returned. 

The length of the payment option you choose may affect the amount of
the offer we will accept.  Generally, an offer paid within five months of acceptance
will require a lesser amount. Your Offer amount cannot include a 
refund we owe you. 

If you meet the Low-Income Certification guidelines, you will not be required to send the initial payment, or make the monthly payments during the evaluation of your offer but you will still need to choose one of the payment options. 

If your offer is returned or not accepted, any required payment(s) made with the filing of your Offer in Compromise and thereafter, will not be refunded. Your payment(s) will be applied to your tax debt. 

Future Tax Obligations

If your Offer in Compromise is accepted, you must continue to timely file and pay your tax obligations. If you fail to file and pay your required tax returns before your Offer is paid in full, or for five years after your Offer in Compromise is accepted, whichever is longer, your offer may have defaulted. 

If you default on your Offer in Compromise, all compromised tax debts will be reinstated. This includes penalties and interest.

The IRS Has Eased the Eligibility for an Offer in Compromise

"I've made a whole set of changes to the Offer in Compromise (OIC) program since I’ve been here to try to increase the participation rate, increase the acceptance rate because it’s good for the tax system,” Doug Shulman, the IRS Commissioner said.

“These changes to the Offer in Compromise program will help give taxpayers a fresh start,” said Doug Shulman, the IRS commissioner, in a conference call with reporters. These changes “are especially appropriate for the American people and small businesses are climbing out of the worst recession in a generation.”

“There are a variety of things, all aimed at increasing acceptance rates for an Offer in Compromise,” Shulman said.

Find out if you are eligible and qualified for an IRS settlement through the Offer in Compromise program. If you cannot pay the IRS due to a limited income, you should look at an Offer in Compromise. If you owe the IRS and your source of income is your Social Security or Disability  (SSDI), you should submit an Offer in Compromise and settle with the IRS.

IRS Tax Relief Success

• Experienced Tax Attorneys

• Lower fees - higher value
• Accredited by the Better Business Bureau - A-Rating
• No Salesman - No Pressure - Positive Results

• Fixed with no hidden charges
• Payable in monthly installments
• Low initial payment to begin immediate work
• Always competitive and affordable

BBB Accreditted



FLAT FEE TAX RELIEF - Good people - Doing Great Work

FLAT FEE TAX RELIEF - Christian Values

The Flat Fee Tax Service, Inc.

Offer in Compromise Help - Line: 

1 - 8 0 0 - 5 8 9 - 3 0 7 8

Fees are posted on our Websites:


  1. The IRS has made a settlement of your tax debt easier. Find out if you are eligible and qualified for an Offer in Compromise.


Post a Comment