How Does an Offer-In-Compromise Work?

         The “Offer-In-Compromise” (OIC) program is available to help people to settle their tax debts. This is a fact that is often advertised by different companies claiming to help people reach success in this way. The truth is that very few people are accepted into this program.

          The basic viewpoint of the IRS is that most taxpayers can afford to pay their taxes, either with what they have, or on a payment plan. The OIC is only for those who will never pay off the debt within 10 years. That is considered the time limit for the IRS to collect. This is important to consider because with the changes to withholding limits brought on by the Tax Cuts and Jobs Act, many people may unexpectedly owe the IRS when they file. In this situation, an OIC will not work. Our next post will start to explain the requirements for this program.

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