Taxpayers who owe more federal taxes than they can pay may be able to seek an Offer in Compromise (OIC) with the IRS. An OIC allows a taxpayer to settle a debt for less than owed, or to enter an agreement for more time to pay, if paying the total would cause financial hardship. In considering an OIC application, the IRS assesses the taxpayer’s ability to pay in terms of income, expenses and asset equity. To be eligible, all tax returns that are due must be filed and current tax payments must be made, including employment tax payments. An OIC requires an application fee of $205, though this may be waived for low-income taxpayers. The process can be complex. Contact us with questions. © 2023