What is an Offer in Compromise (“OIC”)?
An Offer in Compromise is a process to develop a negotiated settlement between the IRS and a taxpayer who the IRS believes owes money. The OIC is a way to resolve the taxpayer’s tax debt for less than the full amount owed to the Internal Revenue Service. An Offer in Compromise is something Mooney McGinn LLP undertakes for clients on a regular basis when there is a reasonable probability of success. The out come of an Offer in Compromise can never be guaranteed. An offer in compromise will not be accepted by the IRS if the Internal Revenue Service believes that the tax debt can be paid in full in a lump sum or through a payment agreement. The IRS will accept a taxpayer’s OIC if the amount offered by the taxpayer is equal to or greater than the reasonable collection potential (RCP). The RCP is how the Internal Revenue Service measures a taxpayer’s ability to pay. Many factors are considered to determine the ability of the taxpayer to pay, and how much and when the taxpayer should pay. Th
