Does an Offer in Compromise Remove an IRS Tax Lien?
Quick Answer
An Offer in Compromise doesn't immediately remove a tax lien. The lien remains in place during the OIC review and payment period, and is only released after you complete all payment terms and meet compliance requirements.
Detailed Explanation
When you submit an Offer in Compromise, any existing federal tax lien stays in place throughout the process. If your offer is accepted, the lien continues during your payment period (either lump sum within 5 months or periodic payments up to 24 months). After you complete all payments AND remain in compliance for 5 years (filing all returns and paying all taxes on time), the IRS will release the lien. This means the lien could remain on your record for 5+ years after OIC acceptance. However, once released, you can request expedited processing to help restore your credit faster.
Key Points to Remember
- Liens remain during OIC review (6-12 months)
- Liens remain during payment period (up to 24 months)
- Must stay compliant for 5 years after OIC acceptance
- Lien released only after completing all requirements
- Total time with lien: potentially 6-7+ years
Timeline
Lien release 5 years after final OIC payment and compliance period
Related Resolution Options
Related IRS Notices
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