Offer-In-Compromise OIC Flashcards
Definition of OIC: What is an Offer-In-Compromise?
A program by the IRS to settle tax debt for less than the amount owed. (IRC § 7122)
Eligibility for OIC: Who qualifies for an Offer-In-Compromise?
Individuals who meet specific criteria. (IRC § 7122; Revenue Procedure 2003-71)
Types of OIC: What are the three types of Offer-In-Compromise?
Doubt as to Liability, Doubt as to Collectibility, Effective Tax Administration. (IRC § 7122; Treas. Reg. § 301.7122-1)
OIC Rejection Reasons: What are common reasons for OIC rejection?
Incomplete information, ability to pay in full, failure to comply with tax laws. (IRC § 7122; Revenue Procedure 2003-71)
OIC Submission Process: How is an Offer-In-Compromise submitted?
Using IRS Form 656, with supporting documents. (Revenue Procedure 2003-71)
OIC Evaluation Criteria: What factors does the IRS consider?
Income, expenses, asset equity, ability to pay. (Treas. Reg. § 301.7122-1)
OIC Payment Options: What are the payment options?
Lump Sum Cash Offer, Periodic Payment Offer. (Revenue Procedure 2003-71; Form 656-B)
OIC Appeal Process: How can one appeal a rejected OIC?
Request a reconsideration or appeal to the IRS Office of Appeals within 30 days. (Revenue Procedure 2003-71)
OIC Compliance Requirements: What are the compliance requirements after acceptance?
Remain in compliance with all tax obligations for 5 years. (IRC § 7122; Revenue Procedure 2003-71)
Effects on Credit of OIC: How does an OIC affect credit rating?
May negatively affect credit score but removes tax lien. (Revenue Ruling 92-59)
Tax Liens After OIC: What happens to tax liens after an OIC?
Released upon payment of the agreed amount. (IRC § 6325)
Future Tax Refunds and OIC: How are future tax refunds affected by an OIC?
Future refunds within the calendar year of settlement are applied to tax debt. (Revenue Procedure 2003-71)
