OIC (Offer in Compromise) is an easing for people wanting to settle tax debts for less than what they owe.
Starting with offers in compromise accepted by IRS after Oct. 31, 2021, the Service is no longer recouping a taxpayer’s refund for the calendar year in which an OIC agreement is reached to offset tax debts covered by that agreement.
For example, assume IRS accepts a man’s offer to settle his 2017 and 2018 tax debts on Dec. 10, 2021. Under the new policy, IRS won’t grab the man’s 2021 refund, shown on his 2021 Form 1040 that he files and apply it as a payment to his 2017 and 2018 tax liabilities, which are subject to the OIC agreement.
The IRS will follow the outlines payment plan.