Offer in Compromise: How to Settle Your Tax Debt
Almost two-thirds of Americans—about 65 percent—either save none of their incomes or save just a small amount, according to a 2018 survey by Bankrate.com. This can be almost catastrophic if they complete their tax returns only to realize that they owe a sizeable tax debt to the Internal Revenue Service. The key word here is "almost." The IRS is willing to work with taxpayers who come up short at tax time. Making an offer in compromise (OIC) is one of a few available options taxpayers have to work things out with the IRS. This program lets you settle your tax debt for less than what you owe. Unfortunately, many consumers misunderstood the program, and some unscrupulous tax preparers abused it as well. The IRS made some changes effective July 16, 2006, to address these issues. What Changed Some adjustments were made to the OIC process under the terms of the Tax Increase Prevention and Reconciliation Act . T