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An offer in compromise (OIC) is an agreement between
a taxpayer and the Internal Revenue Service that settles the
taxpayer’s tax liabilities for less than the full amount owed.
Absent special circumstances, an offer will not be accepted if the
IRS believes that the liability can be paid in full as a lump sum or
through a payment agreement.
In most cases, the IRS will not accept an OIC unless
the amount offered by the taxpayer is equal to or greater than the
reasonable collection potential (RCP). The RCP is how the IRS
measures the taxpayer’s ability to pay and includes the value that
can be realized from the taxpayer’s assets, such as real property,
automobiles, bank accounts, and other property. The RCP also
includes anticipated future income, less certain amounts allowed for
basic living expenses.
For more information please contact our offices at
info@mfblegal.com or call our office directly at 312-466-0800.
Information courtesy of the Internal Revenue
Service, United States Department of the Treasury
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