If you are drowning in tax debt, and payback is not a realistic option, you might qualify for the Internal Revenue Service’s Offer-in-Compromise (OIC) Program. This debt negotiation program is the only way to settle tax debt for less than what you actually owe. By no means is this the only way to get out of tax debt.
The OIC program is only available to certain eligible tax debtors. Taking advantage of the OIC program should be a last resort measure. And, be warned, that the IRS is cracking down more than ever before on debtors who are taking advantage of the program.
Do I Qualify?
In order to qualify for the OIC program as an individual, you must meet the following requirements:
1. You are currently not in an open bankruptcy proceeding.
2. You can’t pay your full tax liability.
3. Paying your tax liability would create a financial hardship.
4. Your expenses and asset equity fall within the IRS’s parameters of appropriate qualifications.
There is a non-refundable application fee of $150 associated with OIC program, as well as an initial payment. However, for many people in desperate situations, these fees are worth the benefit of having a part of their tax debt forgiven.