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Offer in Compromise Questions
Application Fee Questions
209
Will payment of the application fee reduce the OIC amount?
The application fee is in addition to the amount listed on Form 656,
Item 7. However, when the IRS determines the acceptable amount of an OIC based
on doubt as to collectibility, it considers the value of all of the taxpayer's
assets. Because some of the taxpayer's assets were used to pay the OIC
application fee, payment of the fee will reduce the acceptable amount of the
OIC. The taxpayer therefore pays no more for an OIC with the fee than the
taxpayer would have paid without the fee.
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