Offer In-Compromise (OIC) is a program offered by the Internal Revenue Service that permits the government to accept less than what is owed on a tax liability. You should be fairly certain that you are in fact a good candidate for the program before you submit an Offer In-Compromise to the IRS. The Internal Revenue Service will either approve or reject the offer based on two factors:
1. Income of the taxpayer
2. Assets of the taxpayer
If the IRS determines that the client’s income or assets is not sufficient to cover the tax liability, the offer has a good chance of acceptance. However, when a taxpayer possesses assets that would sufficiently cover the tax liability, the IRS will reject the offer. The basic premise for the IRS to approve an offer is that acceptance of the offer will be in the IRS’ best interest, not necessarily in the best interest of the taxpayer. After a successful OIC submission to the IRS is accepted, one of the following payment options listed are established: - Full-payment within 90 days of acceptance – Establishment of a payment plan for the duration of 2 years – Establishment of a payment plan for up to 10 years It is important to realize that both the approval process and the factors associated with the calculation of tax debt by the IRS are complicated and time consuming. In addition, if the offer is submitted, and does not have grounds for being accepted, the taxpayer will incur additional interest and penalties that continue to accrue. Even worse for the taxpayer, the time period for the IRS to collect the debt can be extended, and the option to discharge the taxes in bankruptcy can be delayed.

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