Collection Procedural Questions
Question: I am unable to pay my delinquent taxes. Will the IRS accept an Offer in Compromise?
You may qualify for an Offer in Compromise if you are unable to pay your taxes in full or if you are facing economic hardship or other special circumstances.
Note: Offer in Compromise Application Fee - Your offer must include the $150 application fee. If you are requesting a low-income exception of the fee, you must complete section 4 of the Form 656 (PDF), Offer in Compromise.
Offers received without the $150 fee or a completed section 4 of the Form 656 will not be accepted for processing. Please see Step 6 on Page 4 of the Form 656-B (PDF), Offer in Compromise Booklet, for more information on the application fee, and section 4 of the Form 656 to determine if you qualify for the low-income exception. Please also see Steps 2 and 3 on Page 4 of the Form 656-B to determine whether your application must include either a completed Form 433-A (OIC) (PDF), Collection Information Statement for Wage Earners and Self-Employed Individuals, or Form 433-B (OIC) (PDF), Collection Information Statement for Businesses.
- If you are not granted an Offer-in-Compromise and you are still unable to pay your delinquent taxes in full, you still may be eligible for an installment agreement. File Form 433-D (PDF), Installment Agreement, and pay a $105 user fee, which we have the authority to deduct from your first payment(s) ($52 for direct debit).
- If you default on your installment agreement, you must pay a $45 reinstatement fee if we reinstate the agreement.
- Refer to Tax Topic 204 - Offers in Compromise, for additional information.
Category: IRS Procedures
Subcategory: Collection Procedural Questions