Can’t Pay Your Business Taxes?

An Offer in Compromise could be the solution. See if you qualify to pay less than you owe.

Senior man struggling with business taxes

What is a Business Offer in Compromise?

The IRS and most states offer various tax relief solutions to help individuals and businesses tackle their unpaid taxes. One of these options is an Offer in Compromise (OIC). An OIC allows you to negotiate with the IRS (or state) to settle your back taxes for less than the full balance due, specifically in cases where paying the full balance would create a financial hardship.

Offer in Compromise eligibility checklist requirements

OIC Eligibility Requirements

Generally, the IRS or state tax agency will consider an Offer in Compromise if it believes you cannot pay the full balance within a reasonable period of time. Additionally, the following must also be true:

You filed all required business returns and made your estimated quarterly tax payments (or have a payment plan in place).
The business is not in an open bankruptcy proceeding.
You made your employer tax deposits for the current and past two quarters before applying (if applicable).

Even if you meet all of these requirements, approval for an OIC is still not guaranteed, but working with a tax professional during the application process may increase your chances of acceptance.

The Offer in Compromise Application Process

Depending on your business entity structure, you’ll either apply for an OIC as an individual (sole proprietor) or a business (partnerships, LLCs, and corporations). The process, however, is very similar.

1. Complete a Collection Information Statement.

Sole proprietors will use Form 433-A (OIC); all other business entities will submit Form 433-B (OIC).

2. Submit Form 656, Offer in Compromise.

If you have both personal and business tax debt (partnership), you’ll need to submit a separate Form 656 for each.

3. Pay the application fee.

There is a non-refundable $205 fee (per application) to submit your OIC.

4. Include your initial payment.

When submitting your OIC application, you’ll need to include the first payment of your proposed settlement amount (paid over several months) or a minimum of 20% of the lump sum offer (must be paid in full within five payments or less).

While your OIC application is being reviewed, collections will be temporarily suspended, and a notice of tax lien may be filed. If you elect to make periodic payments instead of a lump sum, you’ll be required to make those payments during the review period. You are not, however, required to make payments on an existing installment agreement. You will be notified in writing if your OIC application is approved or rejected. This can take up to 24 months.

Tax Professional approving Offer in Compromise application

Get Pre-Qualified For an OIC

Before applying for an OIC, we highly recommend getting pre-qualified by a tax professional or using our free Offer in Compromise Calculator tool to see if you’re eligible. The application process can be quite lengthy, and not everyone will be eligible for this type of business tax relief. Avoid unnecessary disappointment by speaking with one of our seasoned tax pros today. Even if you don’t qualify for an OIC, our specialists can help you explore other tax relief options.

Why Work With Business Tax Relief?

Proven Tax Relief Solutions

After your free business evaluation, you’ll receive a customized solution to help reduce your tax debt that is based on your specific situation and budget.

We Keep You Moving Forward

Our proven solutions are designed to help your business stay open and get back on the right path as soon as possible.

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Our tax partners are A+ rated by the BBB and have helped hundreds of business owners get the relief they need – at an affordable rate.

Your Path to Tax Relief Starts With a Free Consultation.

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