Tax Advisor America

Offer in Compromise (OIC)

An Offer in Compromise (OIC) is an agreement filed by a taxpayer which offers a payment to the IRS that is less than the full amount of tax debts owed. Once the IRS has establishes your need for tax relief under one of the following premises they may approve your OIC. Our attorneys have the experience and knowledge to not only deal with OIC's but to repeal OIC's that have been revoked.

The IRS will accept an OIC if the amount offered is equal to or greater than the reasonable collection potential (RCP). The RCP determines the value of the taxpayer's assets; such as property and cars, as well as any expected future income.

Types of OICs

The IRS may accept an offer in compromise if any of these factors prove to be true:

1. Doubt as to Collectability - Doubt exists that the taxpayer could ever pay the full amount owed within the remainder of the legal time for collection.

2. Doubt as to Liability - A genuine doubt or disagreement regarding the amount of tax debt owed as claimed by the IRS.

3. Effective Tax Administration - There is no doubt that the amount owed is correct and there is potential to collect, but an exceptional circumstance like; hardship, public policy, and equity exist as factors when deciding to negotiate an OIC settlement. .

4. Identity Theft - The taxpayer should not be liable for the amount due because they were a victim of identity theft and did not earn the income that was reported.