OICs require upfront payment, IRS says

Under a new federal law, taxpayers submitting new offers in compromise (OIC) must make a 20 percent nonrefundable, upfront payment in many cases, the Internal Revenue Service announced. An OIC application is deemed accepted if the IRS fails to act upon it within two years.

The IRS is updating its Form 656 to reflect the tax-law changes. For more information, go to www.irs.gov and search IR-2006-16.