Filing Taxes

Per Diem Rates from the U.S. General Services Administration

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Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").

Offer in Compromise (OIC)

An offer in compromise allows you to settle your federal tax debt for less than the full amount you owe. It's an option available to you if you can't pay your full tax liability, or doing so creates a financial hardship. The IRS will consider your unique set of facts and circumstances, such as:

  • Ability to pay
  • Income
  • Expenses
  • Asset equity.

Caution: The Offer in Compromise program is not for everyone. If you hire a tax professional, make sure to check their qualifications.

The IRS generally approves an offer in compromise when the amount offered represents the most it can expect to collect within a reasonable period of time. However, before applying for an offer in compromise, the IRS wants you to explore all other payment options before submitting an offer in compromise.

Make Sure You're Eligible

Before filing an Offer in Compromise, make sure you already filed all required returns and have made all required estimated tax payments. The IRS will return any newly filed Offer in Compromise (OIC) application if you have not satisfied these requirements. In addition, any application fee included with the OIC will also be returned.

Note that, any initial payment required with the returned application will be applied to reduce your balance due. This policy does not apply to current year tax returns if there is a valid extension on file.

Bankruptcy:

You are not eligible if you are in an open bankruptcy proceeding. Use the Offer in Compromise Pre-Qualifier  to confirm your eligibility and prepare a preliminary proposal.

Submit Your Application

Find forms for submitting an application and step-by-step instructions in Form 656-B, Offer in Compromise Booklet PDF. 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/ Partnership) must be submitted on separate Form 656;
  • $205 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. If your offer is accepted, you will receive written confirmation. Any remaining balance due on the offer is paid 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.

If you meet the Low Income Certification guidelines, you do not have to send the application fee or the initial payment and you will not need to make monthly installments during the evaluation of your offer. See your application package for details.

Understand The Process

While your offer is being evaluated:
  • Your non-refundable payments and fees will be applied to the tax liability (you may designate payments to a specific tax year and tax debt).
  • A Notice of Federal Tax Lien may be filed.
  • Other collection activities are suspended.
  • The legal assessment and collection period is extended.
  • Make all required payments associated with your offer.
  • You're not required to make payments on an existing installment agreement.
  • Your offer is automatically accepted if the IRS does not make a determination within two years of the IRS receipt date.

If Your Offer Is Accepted

  • You must meet all the Offer Terms listed in Section 7 of Form 656, including filing all required tax returns and making all payments.
  • Any refunds due within the calendar year in which your offer is accepted will be applied to your tax debt.
  • Federal tax liens are not released until your offer terms are satisfied.
  • Certain offer information is available for public review by requesting a copy of a public inspection file.

If Your Offer Is Rejected

IRS Online Tax Calendar:

Avoid penalties!