OIC Individual Doubtful Collectibility Package Offer in Compromise Individual Doubtful Collectibilit 2025

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An Offer in Compromise (OIC) allows you to settle your tax debt for less than the full amount owed. Obtaining an OIC can be a complicated process, but it often presents an appealing way to prevent the levy.
Lump sum: Submit an initial payment of 20% of the total offer amount with your application. If we accept your offer, youll receive written confirmation.
An Offer in Compromise (OIC) does not directly impact your credit score, as the IRS does not report OICs to credit bureaus. However, the related processes, such as federal tax liens filed for unpaid taxes, can indirectly affect your credit.
The Form 656 identifies the tax years and type of tax you would like to compromise. It also identifies your offer amount and the payment terms. Your offer amount must be equal to or greater than the amount calculated in Form 433-A(OIC) or 433-B(OIC).
Will the IRS Stop Trying to Collect Payments? As soon as your OIC and fees are served, the department will then need to stop any collection payment efforts.
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An Offer in Compromise (OIC) does not directly impact your credit score, as the IRS does not report OICs to credit bureaus. However, the related processes, such as federal tax liens filed for unpaid taxes, can indirectly affect your credit. Tax liens, which are public records, can significantly lower your score.
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you cant pay your full tax liability or doing so creates a financial hardship.
The cons include: With this method, you are able to reduce what you owe. However, you also surrender your right to tax credits that you may have access to each year. This could mean your tax return could be lowered each year going forward. OIC does create a public record.

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