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Two Ways to Calculate and Pay Your IRS Offer in Compromise


Since the IRS Fresh Start Initiative revised the Offer in Compromise, more people than ever are getting their Offers accepted.  If you've had your OIC accepted, you're likely getting a good deal from your IRS settlement.  If your accepted Offer was a Lump Sum Cash OIC, you got a really good deal.  Here's why.

You have two basic choices to pay your Offer amount.  Lump Sum Cash and Periodic Payments. 

A Lump Sum Cash Offer in Compromise requires 20% of your total Offer amount to be paid with your submitted OIC.  The remaining balance must be paid in five or fewer payments within5months of your OIC acceptance date.  The Lump Sum Cash option allows you to calculate your Future Remaining Income over 12 months instead of 24, which may be highly beneficial in lowering your offer amount.  For some people, this cuts their Offer amount in half.

A Periodic Payment Offer in Compromise requires your Offer to be paid in full in more than 5 months and less than 24 months.  You must make monthly payments while your OIC is under IRS review, with your first payment submitted to the IRS with your OIC application.  The Periodic Payment option requires you to calculate your Future Remaining Income over 24 months, while the Lump Sum Cash option allows it to be calculated over just 12 months.

For information about Fresh Start Tax Relief and how we can help you determine your best tax debt resolution, call us at 866-937-5079.
Categories: Offer in Compromise
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  • Installment Agreement / Monthly Payment Plan
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