... may be stating the obvious, bt the OIC (Offer in Compromise) IS a settlement, for less than you owe.
Here's the way IRS
puts it on their OIC web page:
An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability
, or doing so creates a financial hardship. We consider your unique set of facts and circumstances:
Ability to pay;Income
We generally approve an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time.
Basically you have to show them that one of two situations exists...
*There is some doubt as to whether the IRS can collect the tax bill from you -- now or in the foreseeable future. The IRS calls this "doubt as to collectibility."
*Due to exceptional circumstances, payment of your full tax bill would cause an "economic hardship" or would be "unfair" or "inequitable."
If you go this this page, you'll see a link to the MOST recent form
for this (They make the point that using the old form could hold up processing):
Submitting the offer consists of the following steps:
You'll find step-by-step instructions and all the forms for submitting an offer in the Offer in Compromise Booklet, Form 656-B (PDF).
Here's that form booklet WHICH INCLUDES the actual 433-B form you submit (you may need to copy and past this address into your browser):
Your completed offer package will include:
Form 433-A (OIC) (individuals) or 433-B (OIC) (businesses) and all required documentation as specified on the forms;
Form 656(s) - individual and business tax
debt (Corporation/ LLC
) must be submitted on separate Form 656;
$186 application fee (non-refundable); and
Initial payment (non-refundable) for each Form 656.
Select a payment option
Your initial payment will vary based on your offer and the payment option you choose:
Lump Sum Cash: Submit an initial payment of 20 percent of the total offer amount with your application. Wait for written acceptance, then pay the remaining balance of the offer in five or fewer payments.
Periodic Payment: Submit your initial payment with your application. Continue to pay the remaining balance in monthly installments
while the IRS considers your offer. If accepted, continue to pay monthly until it is paid in full.
Let me know how else I can help ... (any questions at all)