IRS Offers in Compromise – Offer Terms (Part VII)

If the IRS accepts the taxpayer’s offer, the taxpayer will have agreed to fully comply with the tax laws.

The IRS will keep any refund, including interest, that might be due for tax periods extending through the calendar year in which the IRS accepts the offer. (Information updated in a later TTT)

If the taxpayer doesn’t abide by all the terms and conditions of the OIC, the IRS may determine that the OIC is in default.

For doubt as to collectibility and effective tax administration OICs, the terms and conditions include a requirement that the taxpayer timely file all tax returns and timely pay all taxes for 5 years from the date of acceptance of the OIC.

When the IRS terminates an OIC, the agreement is no longer in effect and the IRS may then collect the amounts originally owed (less payments made), plus interest and penalties.

IRS Topic 204 (TTT 01/11/22)