November 24, 2021
offer in compromise

Tax debt relief may have gotten a little easier. The IRS has just announced a major adjustment to the offer in compromise policy that will remove some obstacles for potentially eligible taxpayers. If you have a large tax liability, now is a great time to seek a resolution!

What is the current OIC policy?

An offer in compromise (OIC) is the most sought-after form of tax relief. In short, this resolution allows taxpayers to settle their debt for less than what they owe with proof of hardship. When an OIC is accepted by the IRS, any refunds for that you receive after an offer is accepted are kept by, or must be returned to, the IRS and goes toward the outstanding balance.

What is the new OIC policy?

Returns

The Taxpayer Advocate Service and the IRS united in a joint effort to make an OIC more attainable. One major change keeps future refunds in the pocket of the taxpayer. Under the new guidance, the IRS will no longer keep, or request the return, of a tax refund. This amendment to the OIC policy is effective as of November 1, 2021. If you would like to apply for an OIC in December of 2021 or later, your next return is yours to keep. This is monumental for taxpayers facing hardship, as we’re expecting more OIC applicants than ever before.

This change isn’t cut and dry, however, as the IRS will not allow you to keep amended returns. Should you receive a refund prior to your offer acceptance or based on an amended return for the tax periods in question of your liability, your refund must be returned to the IRS within 30 days of receiving it.

OBR Remedy

In the original OIC policy, the OBR (offset bypass refund) remedy was unavailable. Now, if you’re experiencing financial hardship, you can qualify for an OBR while your OIC is pending. An offset bypass refund aids taxpayers facing hardship. An overpayment in a return (offset refund) can be given to you by the IRS to help with your tax debt.

Applying for an OIC

Now is truly a great time to seek assistance with tax debt. The IRS is making collaborative effort to create an easy path to a resolution. The process can be long and grueling, but it’s worth the time and energy once you reach the finish line. Give Optima a call for a free consultation at 800-536-0734 and start your journey to financial freedom today!