Is An OIC For You?

An OIC (Offer in Compromise) is a fix you may think about in solving your IRS problems.

Pros

• If you have tax debt, this program allows a deal with the IRS to pay the amount that you can afford while the rest is pardoned. You will have zero tax debt to settle and you can start over.
• Wages and assets cannot be seized during review, significantly lessening your stress.
• When the OIC was accepted and you have paid the balance negotiated, the IRS has to release tax liens in thirty days. Filed as public record will be a Notice of Release of Federal Tax Lien. Your credit rating should improve.

Disadvantages

• For one year, your OIC will be public record. This means that anybody can have access to your information, which does include your finances. This might be an issue in the future. If the IRS does not accept your OIC, information remains confidential.)
• When the IRS accepts your offer, provisions of the IRS Code needs to be complied with for five years.
• The 10-year statute of limitations for collecting taxes is extended from the time the Offer is pending plus 60 days when you submit an OIC. Even if your OIC is rejected, this extension takes effect. It may take the IRS one year to review an OIC. The good news is if it takes the IRS over 2 years to review your OIC, it’s deemed accepted!
• With the acceptance of the OIC, you agree to not question or appeal your tax liability.
• You lose all tax refunds you might be expecting the calendar year the IRS accepts your offer, including interest for that period.
• Disclosure of your full financial history is needed, which might cause more audits if they find that you were hiding something.
• Your tax debt plus penalties and interest will be reinstated in full if you default on your OIC, not including the payments you’ve made.