• July 7, 2018
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Offer in Compromise, or OIC for short, is an agreement between the IRS and a taxpayer that allows the taxpayer to settle their tax liabilities for an amount less than the actual unpaid amount. It is, however, worth mentioning that taxpayers who are financially capable of paying their tax liability in full are ineligible for an OIC. If you owe a hefty amount to the IRS and are looking for relief, it is advisable to apply for an Offer in Compromise. To help you gain insight into the provision, in this blog post, we cover all you need to know about the IRS Offer in Compromise.

Qualification Criteria

Not every taxpayer qualifies for an offer in compromise or OIC. The IRS has a qualification criteria that taxpayers need to fall under the OIC consideration. The criteria states that a taxpayer is eligible for offer in compromise if:

  • There exists a “doubt as to collectibility”.

If there exists any doubt regarding whether the IRS collects the tax bill from the taxpayer, they may eligible for OIC.

  • There exists a “doubt as to liability”

In some scenarios, a taxpayer may be eligible for OIC if there is a doubt about the accuracy of the tax liability assessed by the IRS.

  • Miscellaneous conditions

If a taxpayer after paying their entire tax bill may face financial problems, they may be eligible for OIC.

Application Process

Before submitting an offer to the IRS, it is essential to do your research and check whether you are eligible for OIC. You can also seek expert advice as to how to go about your current tax issue. Having that said, the process of submitting an offer is formal, and therefore you need to follow a set of defined steps for the IRS to receive, check, evaluate, and give you the green light for an offer in compromise.

If you file offline, it is important to attach the fee along with Form 656 and mail it to the IRS. Along with Form 656 and the application fee, you are also required to provide complete financial information using the Form 433-A or Form 443-B, “A” category for individuals whereas “B” category for businesses. Other information you need to provide the IRS include marital status and Collection Information Statement.

After you finish the form filling process, the IRS will ask for proof that will include financial documents, such as vehicle registrations, bank records, and other documentation. Follow the process to the book for speeding up the process of getting the decision from the IRS.

Recourse in Case of Denial

In case the IRS denies your OIC application, the IRS will most likely provide a written reason for the rejection. The IRS can reject an OIC application for various reasons, a few including: the taxpayer made an offer that was too low, or they have a criminal record. In case the rejection is due to an unacceptable offer, the IRS letter will mention an amount that is acceptable. Another thing you are entitled to in case of denial is a copy of the rejection report. You can, however, appeal to a rejected offer in compromise, but it is essential you meet the criteria mentioned below.

  • All information requested by the IRS must be furnished in the time-frame when your offer was being processed.
  • All past tax-returns are filed
  • All tax payments are complete for the present year.

Looking for IRS Debt Relief? Seek Professional Help

Whether you are filing for an offer in compromise or appealing to a rejected offer, it is advisable to seek the help of a professional who can guide you in the right direction. We, at the Law Offices of Nick Nemeth, have a team of experienced IRS tax lawyers specialized in dealing with all sorts of IRS tax related issues. To schedule a consultation, simply call (972) 426-2553, or fill out our contact form and we will get back with you, shortly.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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