Offer in Compromise Payments

On the fifteenth of July, 2006, the IRS changed its policies regarding the Offer in Compromise. Firstly, the amount of time for the assessment has changed, and the IRS now has two years after it judges that the request has met all requirements to process it. If the two-year time limit expires, then the Offer is accepted.

Secondly, payments must be enclosed with Offers in Compromise. Now, all individuals who file must enclose a partial payment of the total Offer amount, the portion of which is determined by the type of Offer in Compromise.

For example, taxpayers submitting cash offers, which must be paid in full in fewer than five installments, must enclose one-fifth of the amount when they submit the OIC. So, if the Offer is $1000, then $200 must be included in addition to the initial processing fee ($150). If these payments are not attached in full, the IRS will return the request without the possibility of appeal.

Taxpayers submitting a deferred Offer must include the first payment of the proposed installment plan, and continue to submit payments in accordance with the plan laid out in the OIC until the IRS either accepts, returns, or rejects the request. If the individual filing the Offer does not make any one of the scheduled installments, the request will be rejected. In either case, no matter the type, the IRS will not send back any funds sent to them while an Offer is being appraised if it is rejected, returned, or withdrawn.