Offer in Compromise (OIC)
PROS
Removes the tax lien against you.
The debt goes away - allowing you to earn more money in the future without having to pay the back taxes.
CONS
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
You will need to be perfectly tax compliant - filing and paying for FIVE YEARS - after your Offer is accepted.
Currently not collectible (CNC)
PROS
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).
CONS
You still owe the IRS and a tax lien might be filed against you.
You might be taken out of uncollectible status if you don't file returns.
You could be taken out of uncollectible status if you show a dramatic increase in income.
The IRS re-reviews uncollectible status to see if you still meet the criteria.
You can find more articles on the Offer in Compromise on the blog HERE
