What is an Offer in Compromise? Get your Life Back with

What is an Offer in Compromise? LifeBack Tax

Taxpayers who owe back taxes to the Internal Revenue Service and are unable to pay in full may be able to reduce their liability by applying for an Offer in Compromise (OIC). An Offer in Compromise is an proposed agreement that allows a taxpayer to settle their tax debt by paying less than their owed balance. Some states, including California and New York, may also allow taxpayers to enter an offer in compromise for state back taxes.

Taxpayers may apply for an Offer in Compromise for one of two reasons: Doubt as to Collectibility, or Doubt as to Liability. Most Offers in Compromise are based on Doubt as to Collectibility, indicating that the taxpayer is either unable to fully pay their tax debt or would face financial hardship if they did so. On the other hand, a Doubt as to Liability offer indicates that the taxpayer is disputing the amount of tax debt they owe.

When making an Offer for Compromise, a taxpayer offers to pay the government a portion of their tax debt, indicates their timeframe for paying this offered amount, and includes financial statements as proof of their inability to pay the full amount. Under a short-term offer, a taxpayer includes an initial payment of 20% of their total offered amount with their offer, and agrees to pay the rest in 5 or fewer payments within the next 5 months. In a long-term offer, the taxpayer agrees to make monthly payments over the next 6 to 24 months, and includes the first monthly payment with their offer as an initial payment. In addition to their initial payment, the taxpayer is also charged a $186 application fee. Both the fee and initial payment may be waived if the taxpayer qualifies as a low-income taxpayer, as defined by the IRS.

To be eligible for an Offer in Compromise, a taxpayer must be current on filing their tax returns. If the taxpayer is in an existing installment agreement, they must also be current on their payments. The IRS considers an Offer in Compromise based on the taxpayer's enclosed financial information. If the IRS determines that the taxpayer can pay more than the amount offered, they may propose a revised amount or reject the taxpayer's offer. While reviewing an Offer in Compromise, the IRS halts accumulation of late penalties and interest on the taxpayer's debt, and the taxpayer is not required to make payments toward existing installment agreements. If the IRS rejects an offer, the taxpayer has 30 days to pay their tax debt before penalties and interest begin accruing again.

Once the IRS accepts an Offer in Compromise, the taxpayer is obligated to pay their offer amount as per their proposed timeframe. The IRS suspends collection actions such as sending collection notices, administrative levies, bank levies, or wage garnishments. Any later tax refunds are applied toward the taxpayer's liability. If the IRS has filed a federal tax lien on the taxpayer's assets, this lien is released once the offer amount is paid. However, even after paying the offer amount, the taxpayer is obligated to file and pay their taxes on time for the next five years to prevent their offer from going into default.

If you are in dire straits due to past due taxes and are unable to pay, we at LifeBack Tax can help you to settle your tax debts through an Offer in Compromise. We are well-experienced in representing the common taxpayer to federal and state tax agencies, and will negotiate with the government on your behalf to find the right settlement for you.

Fast and Easy 4 Step Tax Relief

Step 1

Tax Investigation determin your tax liability

Step 2

Retrieve all documentation from the IRS

Step 3

Calaculate tax liability and current ability to pay

Final Step - Execute offer in compromise get your Life Back

IRS Tax Resolution - Get your Life Back

The fast path to tax resolution can be yours and you can get back to your life. We have a 4 step process that's easy for you. Don't worry about the State or IRS we take care of everything for you. We collect your data, contact the tax agency for you. We handle all negotiations to the tax debt entity so you don't have too. Within 24 hours we stop the wage garnishment or levies so you can focus back on your life.

Get your life back today, move on, go out have some fun let us handle all your worries with your tax debt. Our trained professionals will get that tax settlement for you and you'll be happier for it. At LifeBack Tax our job is your complete satisfaction.

Start Now Settle Now

Why put off what you can do today. Some customers have been putting their tax debt off for years. There is no reason, you have rights. We understand that a bank levy, or wage garnishment can have a severe impact on your life. It can be quite devastating trying to pay all your bills and feed your family while you are being levied or garnished. LifeBack Tax stops all that within 24 hours. Get the IRS off your back today, you have rights and we will represent them and make this as fast and painless as possible for you.

What are you waiting for this is your one opportunity to act now and take your life back. Let the experts at LifeBack work for you and settle this for you once and for all.

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What Client's Say

The IRS sent a notice to my employer... The IRS sent a notice to my employer to take money out of my wages. They didn't send me any notice. I was not going to have any money to pay bills or pay rent. I was so scared and stressed. After calling few companies, your company was the best choice. My levy was released within 24 hours as promised. My employer received a fax from the IRS itself to give me all of my money. I feel that I received the best service without being ripped off . Thank you LifeBack so much!

Amber M.

I had a collection officer drop by my business and handed me a summons.... I had a collection officer drop by my business and handed me a summons. He said that if I didn't comply with the summons, my business can close with all the bank levies and levy to all my venders. I was terrified. I fell behind on my taxes while trying to run the business in this horrible economy. The IRS doesn't care and didn't understand but your professionals understood. You immediately took care of the summons. I didn't have to meet that collection officer ever again nor face any collection action as promised by your tax professionals/. Today thanks to LifeBack I am on a affordable monthly payment plan paying back my employment taxes. Thank You so much, you guys are awesome!!! 5 Stars indeed!

Fernando J.

LifeBack released my bank levy and worked out a great payment plan.... I wanted to send you a thank you letter. You guys went above all means for me. You released my bank levy and worked out a great payment plan. I had tried to fight the IRS for years. Every time I called, I received different information and couldn't keep up with their constant deadlines. The minute I called you, your professionals pulled all account transcripts and helped me file my tax returns. Today I can say that I am on the road to recovery and soon the IRS will fall behind the race and I will win. Thank You – this is not enough to express. I especially want to say thank for the constant communication and the attention provided to my case. I am glad that I was not just any client for LifeBack!!! Thank you

Patricia F.

thank you for helping me release my wage levy with Colorado Department of Revenue... I just want to say thank LifeBack for helping me release my wage levy with Colorado Department of Revenue. I just could never get through their long hold time because of lack of time. I am single mother with two kids. I work full time and postponed the issue until a garnishment hit my wages. Thank you for helping me so that I can feed my kids. Sincerely

Wendy A.

I owed the IRS over $75K.... I owed the IRS over $75K. This was all due to my fault. I didn't keep track of any paperwork or filed my tax returns. Yes, this was the amount that the IRS came up and wanted to collect from me. They kept send me notices until I received a final notice to levy my accounts. I was scared to call a tax relief company because of the scams and the overcharges you have to pay. But after working with your tax professionals, I can say that there is “hope” for people like us. The money owed was from stocks/bonds. Your tax team before even the initial call advised that I needed to file the tax returns in order to reduce my debt. Your team immediately filed my tax returns and I owe close to $20K. Thank you LifeBack for placing me on a affordable payment plan and for being honest and consistent throughout the process. I will recommend your LifeBack Tax to anyone facing the IRS. Many thanks!

Harold O.

Thanks to you, my debt was settled and I have a fresh start.... Thank you LifeBack for settling my back taxes through one of your settlement programs. Being self-employed my income dropped due to the poor economy. I always paid my taxes at the end of years but for the last 3-4 years, I barely enough to meet my necessary expenses. Thanks to you, my debt was settled and I have a fresh start. I promise that I will pay my estimated tax deposits (ETD) on time and not ever fall behind as you instructed. God Bless you. You guys rock!!!

Manny M.

I searched you over the Internet and shopped like anyone would... I have been blessed to found LifeBack to represent me. Thank God that I was not ripped. I searched you over the Internet and shopped like anyone would. Your company provided the best service to me but your pricing was the lowest of all. Thank You for making this an affordable experience for me and taking nightmare called “IRS” off me forever. Thank you LifeBack for doing a great job,

Cynthia W.

I just finally gave up and called LifeBack.... Thank you for settling my taxes and showing the way to recovery. I had no idea that IRS has a expiration period for each year that I owed them money. My taxes owed to the IRS were from 1999 to 2001 due to bad investments and stock market crash. Through the years, my accounts were levied by the IRS several times and few payment plans were established. I just never saw the road of recovery because interest and penalties continued to accrue. I just finally gave up and called your company. Your tax professional advised me of the after 10 years the IRS can't collect the debt. Because I filed the returns late, one of the year expires this year and the other two next year. I am on a affordable payment plan to know that at the end I would save over 10K because IRS can't collect from me. Thank You for explaining the process and making this best light of hope. God bless you!!

John S.