offer in compromise (OIC)

IRS Payment Arrangements Part 3: Other Types Of Arrangements

This is the last part of a three part series of blogs on IRS payment arrangements. While most taxpayers utilize an installment agreement to pay their tax debt, other payment arrangements exist for taxpayers to utilize in the settlement of their outstanding tax debt. Here are some other types of arrangements that are useful in paying delinquent taxes:

Currently not collectible (CNC) status

The IRS may place a taxpayer’s account in currently not collectible status. If a taxpayer owes more than $10,000, the IRS will file a tax lien, but it will cease collection activity. CNC is a temporary status which the IRS regularly reevaluates, usually on an annual basis.

IRS Payment Arrangements Part 1: Introduction

This is the first part of a multiple part series on IRS payment arrangements. This blog will discuss some general points of IRS payment arrangements while future blogs will deal with their individual details.

Individuals whot cannot pay their tax debt within a reasonable time frame may request to make monthly payment arrangement with the IRS to satisfy their tax bill. There are several options, including an IRS installment agreement. As long as the tax debt is paid in full, taxpayers can avoid the penalties and interests associated with their tax debt. It is essential to know that before applying for any payment agreement, a taxpayer must file all required tax returns.

How Long Do I Have To Pay An Offer-In-Compromise?

Taxpayers that qualify may take advantage of the federal “Offer in Compromise” program to resolve and settle their tax problems. The Offer in Compromise (“OIC”) program is not for every taxpayer and the IRS advises that taxpayers explore all other payment options before applying for an OIC. An experienced tax professional is absolutely essential in all steps of the process of formulating, making, and awaiting the IRS to accept, an OIC.

The IRS Offer-In-Compromise Program – How Does It Really Work?

The IRS Offer-In-Compromise Program – How Does It Really Work?An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed. If the tax liabilities can be fully paid through an installment agreement or other means, the taxpayer, in most cases, will not be eligible for an OIC.

In order to be eligible for an OIC the taxpayer must have:

  1. filed all tax returns;
  2. made all required estimated tax payments for the current year; and
  3. made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees.

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