This FAQ is not included in the Internal Revenue Bulletin, and therefore may not be relied upon as legal authority. This means that the information cannot be used to support a legal argument in a court case.
Q. What about taxpayers trying to apply for an Offer in Compromise (OIC)?
A. Taxpayers may still submit an Offer in Compromise if they can't pay their full tax liability, or if doing so would create a financial hardship. Taxpayers looking to submit an offer should explore the OIC Pre-Qualifier tool before submitting an offer. However, for taxpayers who can't immediately pay the full amount, there are a variety of payment options, including payment plans or Installment Agreement at IRS.gov/payments. Most taxpayers who can pay through a payment plan can set it up using the IRS online payment agreement application. Note that IRS is not currently receiving mail, however the IRS is working to reopen its offices and to restore mail service. We will update this document as the situation changes, and taxpayers can check our IRS Operations updates. If a taxpayer submits an offer, and it is returned by the US Postal Service, the taxpayer should keep a copy of that returned offer and resubmit it once the IRS is able to once again process OIC applications.
Q. What about pending OIC applications?
A. The IRS will allow taxpayers until July 15, 2020, to provide any additional information the IRS requested to support a pending OIC. Also, the IRS will generally not close a pending OIC request before July 15, 2020, without the taxpayer's consent, if the case is under IRS jurisdiction, meaning the taxpayer is not in bankruptcy.
Q. What is the status of Offer in Compromise payments?
A. If a taxpayer has a pending or accepted offer, the IRS urges them to continue making their required payments if possible, but temporary relief is available for those affected by COVID-19:
- If the IRS has not currently accepted a taxpayer's offer, the taxpayer has the option of skipping payments between March 25 through July 15, 2020. The taxpayer should resume payments due after July 15, 2020.The IRS will amend the taxpayer's offer to allow them to pay the skipped payments at the end of the offer period, if the offer is accepted.
- If the IRS has already accepted a taxpayer's offer, and the taxpayer is unable to make the agreed payments of their accepted offer because of a COVID-19 hardship, the taxpayer may suspend making payments until July 15, 2020. However, this is ONLY a payment suspension and the taxpayer will need to provide these missed payments when the suspension period ends. If the taxpayer is unable to make up the missed payments, they can contact the number on the notice they receive to discuss their individual needs.
Q. What should I do if my OIC is under consideration and I received a request for documents, payments, or unfiled tax returns prior to the end of the suspension period (July 15, 2020)?
A. Taxpayers who receive requests for information or tax returns prior to the end of the suspension period, if able, should provide the requested information to continue the Offer in Compromise investigation. If the taxpayer is unable to provide the documents or returns, contact the IRS employee at the number provided on the correspondence, keeping in mind the employee may not be available immediately due to office closings and delays in mail deliveries. Note that IRS is not currently receiving mail, however the IRS is working to reopen its offices and to restore mail service. We will update this document as the situation changes, and taxpayers can check our IRS Operations updates.