Offer in Compromise Questions

Offer Determinations

 

401  What happens if the IRS accepts an OIC?

If an OIC is accepted, the following will apply:
 

• The taxpayer must pay the OIC amount as quickly as possible in accordance with the acceptance agreement.
• The IRS will keep any tax refund, including interest due, as the result of an overpayment of any tax or other liability for the tax period extending through the calendar year the IRS accepts the OIC. A taxpayer may not designate a refund and/or overpayment to be applied to estimated tax payments for the following year. This condition does not apply if the OIC is based on Doubt as to Liability only.
• The taxpayer will waive their right to contest in court or otherwise, the amount of the tax liability.
• If a Notice of Federal Tax Lien has been filed against a taxpayer, the IRS will release it when the payment terms of the OIC are satisfied.

The taxpayer must remain in compliance with filing and payment of all tax returns for a period of five years from the date the OIC is accepted or until the OIC is paid in full, whichever is longer. Failure to pay the OIC on time, and/or to remain in compliance during the five-year period or until the OIC is paid in full, whichever is longer, will result in the OIC being declared in default..

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