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What is an IRS Offer in Compromise (OIC)

Lamarre Law Group, P.A. Dec. 27, 2022

An Offer in Compromise (OIC) is a legal agreement between a taxpayer and the Internal Revenue Service (IRS) that allows the taxpayer to settle their tax debt for less than the full amount owed. The IRS may accept an OIC if it determines that the taxpayer cannot pay the full amount of their tax debt or if paying the full amount would create an undue hardship for the taxpayer.

To qualify for an OIC, a taxpayer must meet specific criteria, such as being current on their tax returns and making all required estimated tax payments for the current year. The taxpayer must also submit financial information to the IRS to show that they cannot afford to pay the full amount of their tax debt.

If the IRS determines that an OIC is appropriate, it will review the taxpayer's financial information and determine the settlement amount. The settlement amount is based on the taxpayer's ability to pay and the amount of tax owed.

It is important to note that the IRS does not accept all OICs, so having an experienced team like the Lamarre Law Group, P.A. prepares and represents you increases your odds exponentially. For example, if the IRS determines that the taxpayer can pay the full amount of their tax debt, it will reject the OIC. In that case, the Lamarre Law Group, P.A. can help you explore other options for resolving your tax debt.