A transaction offer (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer's tax liabilities for less than the total amount owed. Taxpayers who can pay their obligations in full through an installment agreement or other means generally won't qualify for an ICO in most cases. Sometimes it's possible to wipe the slate clean with a huge discount. If you qualify for something known as a transaction offer, known as an offer or OIC, the IRS will accept less than the amount a taxpayer owes on a tax bill and cancel it.
A transaction offer or offer is an agreement between you, the taxpayer, and the IRS that settles a tax debt for less than the total amount owed. A security agreement is defined as the government's ability to “raise funds”, in addition to the amount actually guaranteed by the offer, or to add additional terms not included in the standard agreement of Form 656, thus recovering part or all of the difference between the amount of the offer or additional terms of the offer and the compromised liability (IRS). If you do it less than a month after the first offer, you don't need a new 656 form, just a letter that increases the amount of money you offer. If you don't qualify for a transaction offer or if your offer is rejected, seek debt solutions, such as liquidation and consolidation.
For step-by-step instructions and all the necessary blank forms, including requirements for people with low incomes, read the IRS brochure on pledge offers. Each of these forms helps you determine the amount of a potential offer based on your assets, revenues, expenses, and future revenue potential. This money is not refundable, even if the IRS rejects your offer (the IRS will only apply it to your tax bill). The OCI will suspend collectors' activities, so ongoing collection activities, such as wage garnishments, will begin before you submit the pledge offer.
You should weigh the pros and cons of the offer in terms of commitment in light of the other options available. You don't need to file a new Form 656 if you submit a new offer within one month, if your financial situation hasn't changed significantly, and if the new offer isn't radically different from the old one. You can formally appeal a rejected transaction offer, or you can call the person who signed the letter and try to change their mind. Based on the transaction offer requirements, the non-refundable amount cannot be returned to the taxpayer if the offer is rejected or accepted.
This video playlist will guide you through a series of steps and forms that will help you calculate an appropriate offer based on your assets, revenues, expenses and future revenue potential. Confirm that you meet the requirements and prepare a preliminary proposal with the Offer in Compromise prequalification tool. A “compromise offer” is a little-known but remarkably effective way for thousands of people with problems with the IRS to routinely eliminate tens of thousands of dollars in tax debts.
Leave Reply