If you owe back taxes to the IRS or have a substantial bill that you can’t pay, you have options. The IRS isn’t going anywhere, but if you work with them, they can help you resolve your tax debt. One such way to resolve back taxes is the Offer in Compromise. The Offer in Compromise process is a way that you can pay less tax debt than you owe.
Although submitting an Offer in Compromise sounds complicated, it’s very easy with Wiztax. Our free online system guides you through the entire OIC process. You answer simple tax questions then Wiztax calculates your Offer in Compromise settlement amount and fills out all the IRS Offer in Compromise forms you’ll need to file.
We put together an overview of the Offer in Compromise (OIC) steps and timeline so that you know what to expect.
What Are the Specific Steps for an Offer in Compromise?
There are several specific steps that an OIC takes, and it’s important to make sure that you understand the Offer in Compromise steps.
- Gather personal and financial information. Wiztax online system uses this information to calculate your Offer in Compromise settlement amount and fill out the IRS Offer in Compromise forms for you. You’ll need information about your personal finances, including investments (if any), available credit (if any), assets (if any), income (if any), and expenses.
- Fill out all forms: Form 656, Form 433 A, and Form 433 B. Remember, Wiztax fills out these forms for you automatically.
- Attach all required documents. Once Wiztax prepares your OIC forms needed for the Offer in Compromise process, you’ll also need supporting documentation to back up your claims. Wiztax provides simple instructions on what to include and where to mail the forms. Plus, make sure that you retain the originals for your records.
- Pay the application fee. The IRS requires you to pay a non-refundable $205 (at the time of this writing) application fee when filing an Offer in Compromise. You may also be required to make an initial deposit when submitting Form 656. All of this will be outlined for you by Wiztax. Wiztax can also help you with “Low Income Certification” (if applicable), which means you will not need to pay an application fee or provide a deposit.
- IRS Form 656. This is the initial application form, and the one most commonly used.
- IRS Form 433-A (OIC). This is the Collection Information Statement and 8-page form that includes information on your income, assets, liabilities, and expenses.
How Long Does the OIC Process Take?
The Offer in Compromise timeline can vary according to your personal financial circumstances, but takes, on average, about four to six months. The better, more complete, and accurate your personal and financial information is the faster the IRS can determine whether they’ll accept an Offer in Compromise. Incomplete information can make the process take longer, as you may have to re-submit forms. With Wiztax, we take the guesswork out and make everything simple. In addition, we provide our Ready to File™ review, which means a Wiztax Expert with decades of IRS experience reviews everything with you and answers your questions.
What Forms are Needed for an Offer in Compromise?
There are two primary forms needed as part of the Offer in Compromise steps. Again, Wiztax determines which Offer in Compromise forms need to be completed and fills them out for you. For reference, here’s a list of the main IRS OIC forms:
What Are Possible Outcomes from an Offer in Compromise?
If the IRS agrees that the amount you offer for repayment (which is the “Offer Settlement Amount” that Wiztax calculates and provides for you) is the most that they can legitimately expect to collect from you, then they’ll likely accept the offer. Then, once you’ve paid the determined amount, the IRS will settle your debt in full.
When Will I Know If My Offer in Compromise Is Accepted?
You can expect to hear from the IRS about whether or not your Offer in Compromise has been accepted on average in about four to six months.
Do You Need an Offer in Compromise? Wiztax Can Help!
Wiztax free online system guides you through the Offer in Compromise process and gives you helpful advice and tips every step of the way. Start with answering simple tax questions. Wiztax then calculates your Offer in Compromise settlement amount and fills out all the IRS OIC forms for you.
Our Wiztax Experts have decades of Tax Law and IRS experience, and are always available to answer tax questions, assist with the Offer in Compromise process and review all IRS OIC forms before filing. We know which questions to ask in order to get the IRS the most complete and accurate information needed to make a decision about your Offer in Compromise. You can rest easy knowing that all your questions, from the simple to the complex, will be answered.
Start for Free with Wiztax today and Wiztax will calculate and display you Offer amount instantly!
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