All Taxpayers Do Not Qualify for an Offer in Compromise OIC

Absent special circumstances, if you have the ability to fully pay your tax liability in a lump sum or
via an installment agreement, an offer in compromise will not be accepted.

Offer in Compromise Payments are Non-refundable

The IRS considers the 20 percent payment for a lump sum offer and any periodic payments as
“payments on tax” and are not refundable, regardless of whether the offer is declared
not-processable or is later returned, withdrawn, rejected or terminated by the IRS.

Federal Tax Liens are Not Released

If there is a Notice of Federal Tax Lien on record prior to acceptance of the offer, the lien is not
released until the OIC terms are satisfied or until the liability is paid, whichever comes first. A
Notice of Federal Tax Lien may be filed during the course of the Offer in Compromise investigation.

Payments May be Designated

You may designate in writing how the IRS should apply payments made with the filing of the offer
and while an offer is under investigation. Without a written designation, payments will be applied to the
tax liability and in the government’s best interest.

Refunds

The IRS will keep any refund, including interest due, because of an overpayment of any tax or other
liability, for tax periods extending through the calendar year the IRS accepts the OIC.

Exception: Offers submitted under the basis of doubt as to liability.

Levies

The IRS will keep all payments and credits made, received or applied to the total original tax liability
before the OIC was submitted. The IRS may also keep any proceeds from a levy that was served
prior to the submission of an OIC, but which were not received at the time the OIC was submitted.

Statutory Period for Collection Suspended

The statutory period for collection is suspended during the period that the OIC is under consideration
(pending) and is further suspended if the OIC is rejected by the IRS and you appeal the rejection.

Five Year Compliance

If your offer is accepted, you must timely file all tax returns and timely pay all tax for five years or until
the offered amount is paid in full, whichever period is longer. Failure to adhere to these terms will result
in default of the offer and the IRS may then collect the amounts originally owed plus penalties and interest.

Appeal

If your OIC is rejected, you will have the opportunity to file an appeal which will be heard by the IRS
Office of Appeals. There are no appeal rights associated with offers that are returned, withdrawn or
terminated.

Approved Installment Agreement

If you have an approved installment agreement and submit a periodic payment offer, you are not
required to continue to make the installment agreement payments while the offer is being investigated.
You will, however, be required to make the OIC periodic payments as they become due.

Email for more information or call: 800-227-7474