Offer in Compromise
Taxpayers that owe taxes and cannot pay them in full can enter into collection alternative agreements with tax authorities. When the taxpayer lacks the funds to pay the taxes before the collection statute expiration date (CSED), debtors may be able to enter into an Offer in Compromise Doubt as to Collectibility (OIC-DATC) agreement to settle their tax for less than they owe.
A Notice of Federal Tax Lien (NFTL) may be filed when an OIC agreement is accepted depending on the factors involved. A tax dispute may arise if an Offer in Compromise is denied by a taxing authority. In this case, taxpayers should assess their appeals rights.
Offer in Compromise Doubt as to Liability (OIC-DATL)
Offer in Compromise Doubt as to Collectibility (OIC-DATC)
In this scenario the taxpayer disputes that they owe the tax assessed and can file to have the liability removed.