New Oic Law
Under the new law, taxpayers submitting requests for lump-sum OICs must
include a payment equal to 20 percent of the offer amount. The payment is
nonrefundable, that is, it will not be returned if the OIC request is later
rejected. A lump-sum OIC means any offer of payments made in five or fewer
installments.
Taxpayers submitting requests for periodic-payment OICs must include the
first proposed installment payment with their application. A periodic payment
OIC is any offer of payments made in six or more installments. The taxpayer is
required to pay additional installments while the offer is being evaluated by
the IRS. All installment payments are nonrefundable.
Under the new law, taxpayers qualifying as low-income or filing an offer
based solely on doubt as to liability qualify for a waiver of the new partial
payment requirements.
If the IRS cannot make a determination on an OIC within two years, then the
offer will be deemed accepted. If a liability included in the offer amount is
disputed in any court proceeding, that time period is omitted from calculating
the two-year timeframe.
OIC requests are submitted using Form 656, Offer in Compromise. The form
provides detailed instructions for completing an offer and includes all of the
necessary financial forms. When submitting