What happens after my Offer in Compromise is accepted?

After the IRS accepts your OIC, you enter a critical 5-year compliance period. During this period, you must: (1) Pay the agreed amount in full (lump sum within 5 months, or periodic payments per the schedule), (2) File all tax returns on time for 5 years from acceptance, (3) Pay all taxes owed on time for 5 years, (4) Not incur new tax debt for 5 years, and (5) Make all estimated tax payments if self-employed. If you fail any of these conditions, the IRS can default your OIC, reinstate the full original debt (minus payments made), and resume full collection activity. The IRS files a federal tax lien for the OIC amount until paid (though they may withdraw it upon completion). Your OIC acceptance is public record through the IRS's public inspection files for one year. Tax overpayments (refunds) for the year of OIC acceptance and any prior year are applied to the OIC debt and are not returned to you. After you complete all payments and the 5-year compliance period, the remaining original debt is permanently forgiven. The forgiven amount is generally not treated as taxable income (unlike most debt forgiveness).