Offer in Compromise question - what exactly is the "offer payment" when submitting OIC to IRS?

The "offer payment" can be confusing, but I'll break it down for you. When submitting an Offer in Compromise (OIC), you need to include: 1) The application fee ($205 unless you qualify for low-income certification) 2) An initial payment toward your offer amount For the initial payment amount, it depends on which payment option you choose: - Lump Sum Cash Option: Submit 20% of your total offer amount with your application - Periodic Payment Option: Submit your first proposed monthly installment So if the IRS calculator says $28k and you choose the Lump Sum option, you'd submit $5,600 (20% of $28k) plus the application fee with your Form 656. If you choose the Periodic Payment option, you'd submit your first monthly payment (whatever amount you propose in your payment plan) plus the application fee. The key is that your "offer amount" is what YOU propose based on your financial situation - the IRS calculator just gives an estimate. They'll evaluate if your offer is reasonable based on your ability to pay.

Just wanted to share my experience with OIC applications. I tried handling this myself and got so confused with all the paperwork. I ended up using https://taxr.ai to help organize all my financial documentation and find the right form calculations. Saved me so much time figuring out exactly what to submit for my Offer in Compromise. The system helped me understand what a reasonable offer would be based on my specific financial situation. I was about to offer way too little which would've gotten rejected immediately. It also flagged some expenses the IRS would likely disallow which would have messed up my calculations.

I was really skeptical about using an online tool for something as complicated as an Offer in Compromise, but I finally tried https://taxr.ai after seeing it mentioned here. Huge relief! It walked me through exactly what documents I needed and how to calculate my offer amount properly. The tool helped me understand that the IRS looks at my "reasonable collection potential" - not just what I have now, but what they think I could pay over time. My actual offer ended up being quite different from the IRS calculator estimate, but I had all the documentation to back it up. Just got my OIC accepted last week for about 22% of what I originally owed. Definitely worth the time it took to submit everything correctly!

If you're struggling with the OIC process, another huge challenge is actually getting through to someone at the IRS who can answer your specific questions. I spent WEEKS trying to get clarification on the offer payment amount. Eventually found this service called https://claimyr.com that got me through to a real IRS agent in about 20 minutes instead of the 2+ hour hold times I was experiencing. They have a video showing how it works here: https://youtu.be/_kiP6q8DX5c - basically they wait on hold with the IRS for you and then call you when an agent picks up. I was able to get direct answers about my specific situation which saved me from making a mistake on my OIC application.

OK I need to eat some crow here. After getting absolutely nowhere trying to call the IRS for two weeks straight (always "high call volume" messages), I broke down and tried the Claimyr service from the link above. Got through to a real IRS agent in about 30 minutes while I was cooking dinner. The agent answered all my OIC questions and even helped me understand why my previous installment agreement had failed. Turns out I had been filling out the Form 433-A incorrectly and that's why my previous payment proposals kept getting rejected. Wish I had done this months ago instead of stressing and getting nowhere. Sometimes it's worth paying for help when dealing with the IRS.

Be really careful with the OIC process! I submitted one last year and it got rejected because I didn't include all my assets correctly. The IRS is VERY thorough in checking your financial situation. Make sure you account for: - All bank accounts (even small ones) - Retirement accounts (they count these too) - Any property or vehicles - Future income potential My advice is to be 100% transparent. They'll find everything anyway, and hiding assets is the fastest way to get rejected and possibly face worse consequences.

What happens if the IRS rejects your Offer in Compromise? Do they keep the 20% payment you sent with your application? I've been hesitant to apply because I don't want to lose that money if they say no.