Understanding the Payment Options for Your Offer in Compromise

You and your tax lawyer have discussed the different options that you have for paying your outstanding federal taxes. Together, you have decided that an offer in compromise is the right choice for you. The paperwork has been completed, the supporting documentation has been gathered, and the offer is almmost ready to submit. However, that is not where the decisions end. Now, you must decide how you are going to pay the money that you owe, pursuant to your offer in compromise agreement.

Offer in Compromise Payment Options

Generally, you have two options when it comes to paying your OIC. You can submit:

  • A Lump Sum Payment. A lump sum payment does not mean that you pay your outstanding taxes in one payment. Rather it means that you pay at least 20% at the time you submit your Offer in Compromise and pay the rest in five or fewer payments, according to the terms of your agreement.
  • Periodic Payments. If you chose this option, then you will make monthly payments to the IRS to satisfy your tax debt. The first monthly payment should be submitted with your offer, and you should continue to make monthly payments while the offer is pending and once it is approved.

Special conditions may apply if you meet the low-income guidelines.

You Owe it to Yourself to Consult an Experienced Tax Attorney Before Submitting an OIC

You need to be ready to comply with the terms of any offer in compromise that you submit. Accordingly, the time to consider your offer in compromise payment options is before you submit an offer. We can help you do that and can suggest the payment option that best meets your personal needs.

For more information, give us a call today at 800-721-7054, and download your FREE copy of our book, The Ultimate Survival Guide for IRS Problems.

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