Offer in Compromise (OIC)

Installment Agreements and Offers in Compromise, Taxes & IRS
Published Date: October 24, 2024
Last Modified: 1 month ago

What is an Offer in Compromise (OIC) and How Does it Work?

An Offer in Compromise (OIC) is a formal agreement between you and the IRS where the IRS agrees to accept a lower amount than you owe to settle your tax debt. The IRS will consider your unique financial situation, including your ability to pay, income, expenses, and asset equity. It is not a right and must be applied for and approved.

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Glossary Article

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Installment Agreements and Offers in Compromise, Taxes & IRS

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Letter 86C: Refusal to Process Offer in Compromise

Letter 86C is an IRS notification stating they won't process your Offer in Compromise (OIC) application. This means they found issues with your submission before even evaluating your ability to pay.

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The Offer in Compromise Pre-Qualifier Tool allows taxpayers to preview their eligibility to settle IRS tax debt for less than the full amount through an Offer in Compromise.

IRS Form 656: Offer in Compromise

IRS Form 656, also known as the Offer in Compromise (OIC), is a way for eligible taxpayers to potentially resolve their tax debt with the IRS for a lower amount than they originally owed. It's a tool for taxpayers who are experiencing severe financial hardship.

Offer in Compromise: Effective Tax Administration

An Offer in Compromise allows taxpayers to resolve their IRS tax debts for less than the full amount owed, offering relief when paying in full isn't feasible.

Letter 3489: Offer in Compromise Reconsideration Request

IRS Letter 3489 is a notification that the IRS has reconsidered your rejected Offer in Compromise (OIC). It outlines their decision and provides avenues for further action if you disagree.

Installment Agreements vs. Offers in Compromise: Which is Right for You?

When you owe the IRS more than you can pay at once, IRS Installment Agreements and Offers in Compromise provide structured ways to manage or reduce your tax debt.

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