Collection Procedural Questions
Question: I am unable to pay my delinquent taxes. Will the IRS accept an Offer in Compromise?
Answer:
You may qualify for an Offer in Compromise if you are unable to pay your taxes in full or if you are facing economic hardship or other special circumstances.
Note: Offer in Compromise Application Fee - Your offer must include the $150 application fee. If you are requesting a low-income exception of the fee, you must complete section 4 of the Form 656, Offer in Compromise.
Offers received without the $150 fee or a completed section 4 of the Form 656 will not be accepted for processing. Please see Step 6 on Page 4 of the Form 656-B, Offer in Compromise Booklet, for more information on the application fee, and section 4 of the Form 656 to determine if you qualify for the low-income exception. Please also see Steps 2 and 3 on Page 4 of the Form 656-B to determine whether your application must include either a completed Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals, or Form 433-B (OIC), Collection Information Statement for Businesses.
- If you are not granted an Offer-in-Compromise and you are still unable to pay your delinquent taxes in full, you still may be eligible for an installment agreement. File Form 433-D, Installment Agreement, and pay a $105 user fee, which we have the authority to deduct from your first payment(s) ($52 for Direct Debit).
- If you default on your installment agreement, you must pay a $45 reinstatement fee if we reinstate the agreement.
- Refer to Tax Topic 204 - Offers in Compromise, for additional information.
Additional Information:
Category: IRS Procedures
Subcategory: Collection Procedural Questions
