Getting the letter from the IRS stating that your Effective Tax Administration (ETA) Offer in Compromise (OIC) has been accepted is a moment of immense relief. It is the “fresh start” you’ve been working toward. However, it is not the time to stop paying attention.
Acceptance is conditional. You must follow specific rules to ensure the settlement remains valid. At Highland Tax Group, we’re here to ensure you understand your obligations under your ETA OIC and can successfully complete them.
Abiding by the Payment Period
Depending on the terms of your offer, you will either pay a Lump Sum or Short-Term Periodic Payments. You must make these payments exactly as scheduled. A single missed or late payment can void the entire agreement, and the IRS will reinstate your full original debt, plus all the interest that was “frozen” during the process.
Pay Attention to the Five-Year Probation
This is the most critical part. Once your offer is accepted, you must remain 100% compliant with all tax laws for the next five years. This means:
- Filing all tax returns on time.
- Paying all taxes due on time.
- Making necessary estimated tax payments if you are self-employed.
If you file a return late or owe a balance in year three of your five-year “probation,” the IRS can revoke your settlement and come after you for the original amount.
Release of Liens
Once your offer amount is paid in full, the IRS is required to release any Federal Tax Liens within 30 days. This is done by the IRS issuing a Certificate of Release of Federal Tax Lien. This is the final step in restoring your credit and your peace of mind.
Understand What You Need to Do Under Your Accepted OIC with Highland Tax Group
At Highland Tax Group, we don’t just get you to the finish line; we help you stay there. We work with our clients to set up systems, so they never fall out of compliance again. If you’ve just received an acceptance or if you’re ready to start the process, contact us today. Let’s make this your last IRS problem.