Friday, July 17, 2020

Offer in Compromise (OIC)

An Offer in Compromise (OIC) is a formal agreement between a taxpayer and the IRS that settles the taxpayer’s debt for less than the full amount owed. It allows taxpayers who cannot afford to pay their delinquent tax liability the opportunity to settle permanently for a reduced amount. If an OIC is not prepared or submitted correctly or if the taxpayer is not in compliance, the IRS can and will reject an OIC.



tax return



The Internal Revenue Code allows penalties and the associated interest to be abated (removed) by the IRS if the taxpayer can show reasonable cause. Penalty abatement is often the first step in reducing size-able tax debt and has the potential to lower the amount owed to the IRS by up to 30%. Even if your account is paid in full, the IRS will refund you the penalties and corresponding interest once your penalty abatement is approved.



tax return



Not filing a tax return is far worse than filing a tax return and not being able to pay the tax amount owed. Un-filed tax returns may even be considered a crime, with punishments of up to $25,000 in fines and a 1-year prison sentence for each un-filed tax year.



tax return


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