How to Avoid an Offer in Compromise Default (Before It’s Too Late)
So your IRS Offer in Compromise was accepted. You settled your tax debt. You’re breathing easier.
But here’s what most taxpayers don’t know:
Nearly 1 in 3 OICs end in default.
And when that happens, the IRS can throw the full original debt (plus interest and penalties) right back at you.
At Boulanger CPA, we help Oklahoma taxpayers not just get OICs approved — but stay in compliance so their deal sticks.
๏ปฟ
Here are the 5 most common reasons people default their OIC, and how to make sure it doesn’t happen to you.
The IRS requires you to file all tax returns on time for 5 years after your OIC is accepted.
If you miss even one year, your offer can be voided.
If you owe the IRS for any new year within the 5-year compliance window, your offer is in danger.
Some Offers in Compromise are paid over 6–24 months instead of a lump sum.
Miss just one payment — even by a few days — and your agreement could default.
The IRS might still send you occasional notices even after your OIC is accepted. If you ignore a request for documents or a CP2000 letter, it can escalate into a new issue.
Many people default just because they lose track of deadlines or cash flow. This is especially true for self-employed Oklahomans who don’t have withholding.
An accepted Offer in Compromise is a fresh start — but you have to maintain it.
We help Oklahoma clients:
๐ Call
(405) 384-4900
๐
Schedule a free strategy call
FAQ
What causes an Offer in Compromise to default?
Most defaults happen due to missed tax returns, new tax debt, or late installment payments within the 5-year compliance period.
Can I fix a defaulted OIC?
In some cases, yes. You may appeal the default or reapply if your financial hardship still qualifies, but it's best to stay compliant from the start.
Do I have to make estimated payments after an OIC?
Yes, especially if you’re self-employed. Estimated taxes help ensure you don’t owe new balances that could default your settlement.
What if I miss an IRS letter after my OIC is accepted?
Never ignore IRS mail. If they send a compliance notice and you fail to respond, it can lead to enforcement or default of your agreement.
โ๏ธ About the Author
Marc Boulanger, CPA, is the founder of Boulanger CPA and Consulting PC, a CPA firm based in Oklahoma City, OK.
Marc is the author of Oklahoma Taxpayers' Guide: Taking a Stand Against the IRS and has resolved hundreds of complex federal and state tax cases.
With over a decade of experience in IRS and OTC representation, Marc helps Oklahomans navigate high-stakes tax problems with clear strategy and calm expertise.
He is a Certified Tax Representation Consultant and a member of the American Society of Tax Problem Solvers (ASTPS).
๐ Office: Oklahoma City, OK | ๐ (405) 384-4900 | ๐ www.oklahomacity.cpa
Marc The CPA's Tax Blog
