Tax relief programs
Offer in Compromise
Settling an IRS balance for less than the full amount is real — but it isn't for everyone, and the rules are stricter than the ads suggest. Here's an honest look at how it works.
The basics
What an Offer in Compromise actually is
An Offer in Compromise (OIC) is a formal agreement in which the IRS accepts less than the full balance owed and closes out the rest. It exists because collecting the full amount from someone who genuinely can’t pay costs the government more than it recovers.
The IRS decides using a calculation, not a negotiation. It looks at what you earn, what you reasonably spend, and what your assets are worth, and arrives at a figure it believes it could collect from you over time. If that figure is less than what you owe, an offer becomes possible.
You have probably heard companies promise to settle tax debt for “pennies on the dollar.” No firm can know whether you qualify before reviewing your finances and your IRS transcripts, and no firm can guarantee the IRS will accept an offer. Any promise made before that review is a sales pitch, not an assessment.
Eligibility
Who tends to qualify
These are the factors that carry the most weight. Meeting them doesn't guarantee acceptance, and missing one doesn't always rule you out.
You're caught up on filing
All required returns must be filed before the IRS will consider an offer. This is the most common reason applications get returned unopened.
Your income barely covers necessities
The IRS allows specific amounts for housing, food, transportation and health care. What's left over after those allowances is what it expects you to pay.
You have limited equity
Home equity, vehicles, retirement accounts and savings all count toward what the IRS believes it could collect. Significant equity usually rules out an offer.
Our approach
How we handle an offer
We do the qualifying math before you commit, not after.
Transcript and financial review
We pull your IRS account transcripts and build your financial picture the way the IRS will, using its own allowance standards.
An honest recommendation
If the numbers don't support an offer, we tell you so and point you toward what does fit. We won't file an application we expect to be rejected.
Preparation and filing
Forms 656 and 433-A(OIC), the supporting documentation, and the application fee or low-income waiver, assembled to the IRS's specifications.
Working the case through
Examiners often request more documentation or propose a different amount. We respond on your behalf, and appeal a rejection when there are grounds to.
IRS review of an offer commonly runs many months, and timelines shift with IRS staffing. Collection activity is generally paused while an offer is pending, but your specific circumstances determine what applies to your case.
If an offer isn't right
Other paths worth considering
Most people we speak with end up in one of these instead. They're less publicized, but often the better fit.
Installment agreement
A structured monthly payment based on what you can actually afford, which keeps collection activity from escalating.
Learn moreCurrently Not Collectible
A pause on collection for taxpayers whose income doesn't cover necessary living expenses, reviewed periodically by the IRS.
Learn morePenalty abatement
Relief from penalties where reasonable cause or first-time abatement criteria apply, which can meaningfully reduce a balance.
Learn moreCommon questions
Offer in Compromise questions
What does it cost to apply?
The IRS charges an application fee and requires an initial payment with the offer, though both may be waived if you meet its low-income certification. Our professional fee is quoted in writing before any work starts and is separate from what the IRS charges.
What happens if the IRS rejects my offer?
You have appeal rights, and a rejection is sometimes reversed when the examiner's numbers can be corrected. If an appeal isn't warranted, we move to the next best option so you aren't left where you started.
Do I have to stay compliant afterward?
Yes. Accepted offers require you to file and pay on time for five years. Falling out of compliance can reinstate the original balance, so we help you set up withholding or estimated payments that keep it from happening.
Can you tell me over the phone whether I qualify?
We can give you a realistic read once we know your income, household size, expenses, and what you own — usually within the first conversation. A firm answer needs your IRS transcripts, which we can request with your authorization.
Free consultation
Find out where you actually stand
We'll run your numbers the way the IRS does and tell you plainly whether an offer is realistic for you. No cost, and no obligation to hire us.
Request your free case review
Takes about two minutes.
Your request is in.
A tax professional will review your details and call you within one business day.