When to Submit an OIC

When to Submit Your OIC

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Before you can submit an OIC you must be compliant on filing all past returns and up to date on current year withholdings and/or estimated tax payments. This must be up to date and appearing on IRS computer systems before submitting your OIC.

If you are filing in a current year (e.g. 2018) and last year’s return (e.g. 2017) has not yet been filed either because the due date (Apr 15) has not come yet, or you have an extension filed, you must file that return regardless of the future due date or any extensions to file. Otherwise, you must wait to file the OIC until after the return has been filed. The same is true of business returns.

You cannot hold off on filing a return until after the OIC is filed as a tactic to try to get the refund from that return to not be offset as a part of the OIC process. The IRS has built in measures that prevents you from doing that. It’s complicated and I will explain in a later article.

Once you have your records organized and the forms completed, get the OIC filed. It is a process can take 6 months to a year, sometimes longer depending on any complications of your case.

Have the required funds available to send in with your OIC submission.

There is a filing fee of $186 payable with the OIC submission. Write a separate check for that amount and in the memo section write in your SSN(s) or FEIN and “Form 656.” This fee is not refundable.

For lump sum cash offers, there is also a requirement for a down payment of 20% of the amount offered. This must be submitted with the OIC submission. Write a separate check for the amount and in the memo section write your SSN(s) or FEIN and “Form 656 Down Payment.” This payment is not refundable, but will be applied to the oustanding tax balance, including accruals.

If you are making an offer to pay the OIC over 24 months, the first payment must accompany the OIC submission. Write a separate check for the payment amount and in the memo section write your SSN(s) or FEIN and “Form 656 initial periodic payment.” You will need to send in monthly payments while your Offer is pending.

Other Articles: (in process of updating and posting to the web. Available when there is a link.)

Tips, Tricks, and Traps to Avoid

Identifying your income

Compliance Requirements

What Information Is Needed to Complete an OIC Package?

Future Income

Necessary and Allowable Living Expenses

Dissipated Assets

Collateral Agreements

Annuitizing Assets to Produce Future Income

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