I went through the OIC process about 18 months ago and wanted to share my experience since you're looking for real stories. I owed around $28,000 in back taxes from 2019-2021 when my freelance income wasn't being properly tracked. The process was honestly more complex than I expected, but it worked out. I ended up settling for $3,200 paid in a lump sum. The key things that helped me: 1) I was brutally honest about my financial situation - included everything down to my $800 car value 2) I gathered 3+ years of bank statements, pay stubs, and expense records before starting 3) I calculated my reasonable collection potential very conservatively using the IRS formula The biggest surprise was how thorough their review was. They asked for additional documentation twice, including proof of some medical expenses I'd claimed. The whole process took about 8 months from submission to acceptance. One thing I wish I'd known: having a tax lien in place actually helped my case because it showed genuine financial hardship. Also, timing matters - I submitted in February when their workload is supposedly lighter. Overall, it was stressful but absolutely worth it. Just make sure you qualify before spending the time and $205 application fee. The IRS pre-qualifier tool is pretty accurate.

I successfully completed an OIC in 2023 and want to share some insights that might help. I owed $47,000 from a business closure and settled for $5,800 over 12 months. The biggest lesson I learned: preparation is everything. I spent 2 months gathering documents before even starting the application. Bank statements, tax returns, proof of expenses, asset valuations - literally everything. When the IRS requested additional documentation (which they did twice), I had it ready within days. One thing I haven't seen mentioned here is the importance of your monthly disposable income calculation. The IRS uses a very specific formula, and even small errors can sink your application. They look at your income minus allowable living expenses to determine what you can realistically pay over time. Also, be prepared for the emotional toll. Living with uncertainty for 9 months while they reviewed my case was incredibly stressful. But when that acceptance letter came, it was life-changing. Going from $47K debt to manageable payments literally saved my financial future. My advice: if you truly can't pay the full amount and meet their financial hardship criteria, it's absolutely worth pursuing. Just go in with realistic expectations and impeccable documentation.

19 Something that hasn't been mentioned yet is that the IRS audit rate for self-employed people making under $100k is actually pretty low, around 0.6% currently. That said, missing income that has been reported to the IRS via 1099 is one of the surest ways to increase your chances. File that 1040-X as soon as possible, and make sure you pay what you owe plus any interest. The penalties for an honest mistake are usually pretty reasonable if you fix things yourself before they send you a notice.

As someone who went through a similar situation a few years ago, I can tell you that your anxiety is understandable but probably worse than the actual consequences will be. I missed reporting about $4,800 in freelance income and was absolutely terrified about getting audited. Here's what I learned: The IRS gets millions of tax returns and they're looking for patterns of intentional fraud, not honest mistakes from people who are generally compliant. A one-time oversight, especially when you're proactive about fixing it, is viewed very differently than systematic underreporting. I filed my 1040-X about 8 months after my original return, paid the additional tax plus some interest (which wasn't as bad as I expected), and never heard another word about it. The whole thing was resolved without any drama. The key is being proactive. Don't wait for them to find it - fix it yourself. That shows good faith and honest intent, which matters a lot in how they handle these situations.

TD Bank customer here as well! I'm in the exact same situation - WMR shows 2/28 deposit date but nothing yet. I called TD's customer service this morning and they confirmed they haven't received any pending deposits from the IRS for my account. The rep mentioned that even though today is a holiday, they do process ACH transfers if they receive them, but it sounds like the IRS batch for TD Bank customers might not have been sent out yet. Fingers crossed we see something tomorrow morning! I'm checking my account obsessively at this point.

Another TD Bank customer here checking in! I've been in the same boat - WMR shows 2/28 but still nothing in my account as of this morning. I actually called TD yesterday and they told me the same thing about processing ACH transfers on holidays if they receive them. It's frustrating because I know some other banks like Capital One and Ally seem to get refunds posted earlier than the WMR date. I think TD is just more conservative with their processing times. At least we're all in this together! I'm going to try to stop obsessively checking and just wait until tomorrow morning. Hopefully we'll all wake up to our refunds finally being there.

Kind of related question - my wife was technically "employed" all year but on unpaid maternity leave for 9 months. Do we need to file joint or can we file separate since she had no income? Would save us a ton on taxes if we could file separate.

I went through this exact situation two years ago when I was on FMLA leave without pay for most of the year. I put my actual job title (accountant) in the occupation field and had zero issues with the IRS. The key thing to remember is that the occupation field is separate from your income reporting. The IRS uses W-2s, 1099s, and other income documents to determine what you actually earned - the occupation field is mainly for their statistical tracking purposes. Even though it feels weird listing an occupation you didn't actively perform that year, you were still technically employed in that role. It's similar to how someone who's retired might still list their former profession if that's their primary work background, or how students often list "student" even if they had part-time work. Don't overthink it - just put "Software Developer" and move on with the rest of your return. The IRS has seen every employment situation imaginable!

One more point that could apply to your situation - if you're considered a resident alien for tax purposes but a nonresident for USCIS/immigration purposes, make sure to check if there's a tax treaty between the US and Brazil. Many countries have tax treaties with the US that can reduce or eliminate double taxation on certain types of income. As a first-year resident, you might qualify for special provisions under the treaty. For example, I'm from India, and under the US-India tax treaty, there are special provisions for students, teachers, and researchers that can exempt certain income from US taxation for a limited time.

There is indeed a tax treaty between the US and Brazil that could potentially help with your situation! The US-Brazil tax treaty includes provisions that can help prevent double taxation and may provide certain benefits for new residents. To claim treaty benefits, you'll typically need to file Form 8833 (Treaty-Based Return Position Disclosure) if you're taking a position that the treaty overrides or modifies an Internal Revenue Code provision. However, not all treaty benefits require this form - some can be claimed directly on your tax return. Since you were paying taxes in Brazil for part of 2024, you might also be eligible for the Foreign Tax Credit (Form 1116) to offset taxes you paid to Brazil against your US tax liability. This can help reduce the double taxation burden even if specific treaty provisions don't apply. Given the complexity of your situation - being a dual-status alien with foreign income and potential treaty benefits - I'd strongly recommend consulting with a tax professional who specializes in international taxation. They can help you navigate both the residency determination and any available treaty benefits to ensure you're not overpaying taxes to either country.