Offer in Compromise Program [OIC Program] Law and Legal Definition

An offer in compromise program [OIC Program] is an agreement between a tax payer and the Internal Revenue Service [IRS] to settle the tax payer’s tax liability for an amount less than the actual amount owed. This program allows an unpaid tax payer to negotiate with IRS. This program is carried out pursuant to the provisions of 26 USCS § 7122. The program aims at compromising tax issues when it is in the best interest of both taxpayer and the government. This program also promotes voluntary compliance with all future payment and filling requirements.

A person to be qualified under the OIC program must prove any of the conditions like:

1. doubt as to liability;

2. doubt as to collectibility;

3. effective tax administration; and

4. existence of any special extenuating circumstances.