How to File an Offer-in-Compromise: Lump-Sum Offer
An offer-in-compromise (OIC) is an “offer” to the IRS to settle your tax debt for less than what you owe. A “Lump Sum” Offer is one in which the taxpayer agrees to pay the offered amount within five months of the date of acceptance. Your offer amount will be based on your calculated Reasonable Collection Potential (RCP). Two components will be used to calculate your RCP.
● Net Equity in Assets
● 12 months of Future Income
Click here to read a previous blog post for an explanation of Reasonable Collection Potential.
When filing the Lump Sum Offer, the taxpayer sends in two checks that accompany the Offer (with Form 656):
● One check for..(continue reading)