A commitment offer (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer's tax liabilities for less than the full amount due. Taxpayers who can pay their debts in full through an installment agreement or other means generally won't qualify for an OIC in most cases. A commitment offer (OIC) is when the IRS accepts an amount less than the total amount the taxpayer owes. You can pay a lump sum over five months OR make monthly payments over a 24-month period.
A commitment offer is a way to settle a tax debt with the IRS. You make an offer to pay, usually a small fraction of what you owe, and if the IRS accepts it, your tax bill is considered paid in full. Your down payment should be 20% of what you offer to pay (if you pay in five or fewer installments) or your first monthly installment (if you pay in six or more monthly installments). Instead of trying to manually calculate the value of the offer you want to propose to the IRS, you should use a compromise offer calculator to avoid errors.
This is how an IRS commitment offer works, what you need to qualify, and what you should know about the program. If you pay more taxes in the current year than in the previous year, obviously take the higher value. The tax lawyers at Brotman Law can help you prepare your OIC so that it has the best chance of being accepted the first time. Many of us, both as individuals and companies, drown in tax debts with no idea how we can pay them off.
As a taxpayer, you must ensure that you justify all the expenses you claim, because if the IRS is not convinced that you have paid an expense, they will reject it. The IRS commitment offer form is fairly simple and you can decide to complete and submit your request on your own without receiving any legal advice. The 433-A (OIC) is the financial statement that the IRS uses to evaluate an individual commitment offer. At the end of the offer, you'll see a list of the items that the IRS wants, and that's very, very important.
If you find an accredited taxpayer clinic in your area to guide you through the application process, your application may be more likely to be accepted. You will also complete information about the total number of members of your household, the exact amount of the IRS tax debt you owe, and the most recent tax year in which you want to commit your payment. Individual results will vary depending on your specific circumstances, including your ability to provide Alleviate Tax with accurate and timely information. There are tax offer options in commitment calculators available online for you to use for free.
You'll need to obtain bank statements within the offer period (normally six months) that show a zero balance. With a compromise offer, you can pay off your tax debt with less than you currently owe (sometimes much less as well).