The biggest question, though, is: which one of these two resolutions is better for you and your tax situation?
Offer in Compromise (OIC)
Removes the tax lien against you usually for a fraction of what you owe.
The debt goes away - allowing you to earn more money in the future without having to pay the back taxes.
You will have to pay a $186 filing fee to process your Offer.
You will have to pay a certain amount to settle your debt (depending on what you qualify for) within about 11 to 24 months.
Your Offer might very well be REJECTED.
If you submit an Offer - you "freeze" the statute of limitations clock on your tax debt. In other words, if you FAIL to get your Offer accepted, you will lose the time on that statute clock.
You will need to be perfectly tax compliant - filing and paying for FIVE YEARS - after your Offer is accepted.
You will lose your first two tax refunds (so be sure not to over withhold).
Currently Not Collectible (CNC)
You pay zero.
You are taken out of collections. You do not need to fear being levied or garnished anymore.
Does NOT freeze the statute of limitations clock - debt can expire (eventually).
You still owe the IRS and a tax lien might be filed against you.
You might be taken out of "currently not collectible" if you don't file returns.
You could be taken out of "currently not collectible" if you show a dramatic increase in income.
The IRS re-reviews "currently not collectible" to see if you still meet the criteria.
You can find more articles on Offer in Compromise on the blog HERE