Settle what you owe
Offer in Compromise
An Offer in Compromise settles a federal tax debt for less than the full balance. It is the option people hope for most — and the one most often oversold.
An Offer in Compromise (OIC) is a formal agreement in which the IRS accepts less than the full amount you owe and closes out the rest. It exists because the IRS would rather collect what a taxpayer can genuinely pay than chase a balance that will never be collected. When someone qualifies, the relief is real and permanent.
The catch is that qualifying is a math problem, not a negotiation of feelings. The IRS looks at what it calls reasonable collection potential: the equity in what you own, plus what's left of your income each month after allowable living expenses, projected forward. If that number is less than your balance, an offer becomes credible. If it's more, the IRS will conclude it can simply collect in full — and an offer filed anyway is a filing fee and many months spent for a predictable rejection.
So the first thing we do is run your numbers against those standards before anything gets filed. If an OIC fits, we build the offer carefully — the financial statements, the documentation, the valuation positions that are defensible — because a poorly supported offer gets rejected on facts that could have been addressed up front. If it doesn't fit, we say so plainly and point you at the options that do, which is usually a payment plan, penalty relief, or a hardship status.
How we handle it
The sequence we follow.
Transcripts and a real number
We pull your IRS account transcripts to confirm the true balance, the tax years involved, and how long the IRS still has to collect.
The qualification math
We build your financial picture against IRS allowable-expense standards and calculate reasonable collection potential — before any paperwork is filed.
Build and file the offer
If the math supports it, we prepare Form 656 and the supporting financial statement with documentation that anticipates the examiner's questions.
Work it through review
Offers draw follow-up requests and can be negotiated or appealed. We handle the correspondence and keep the file moving.
What we won't tell you
We won't quote you a settlement figure before we've seen your finances, and we won't file an offer we expect to lose so that a fee looks justified. Acceptance rates are meaningfully lower than the advertising in this industry implies, review commonly takes many months, and the collection clock is paused while an offer is pending. Where an offer is a long shot, you'll hear that from us first — and you'll hear what would actually help instead.
FAQ
Offer in Compromise: common questions
How much will the IRS settle for?
There's no standard percentage. The settlement figure is driven by a formula — your equity in assets plus your projected disposable income — not by negotiation. Two people owing the same amount can get very different results. Anyone quoting you a number before reviewing your finances is guessing.
How long does an Offer in Compromise take?
Commonly several months to a year or more from filing to decision, depending on IRS workload and how quickly documentation comes together. We give you a realistic timeline once we've reviewed your transcripts.
What happens if my offer is rejected?
A rejection can be appealed, and a rejected offer doesn't close off other paths — an installment agreement, penalty abatement, or a hardship status may still fit. We plan for that possibility from the start rather than treating an offer as the only exit.
Do I have to be caught up on filing first?
Yes. Unfiled returns will stop an offer before it starts, and current-year withholding or estimated payments generally need to be on track. If you're behind, getting current is the first step — and something we handle.
Related
Often looked at alongside this.
Installment Agreements
A payment plan is the most common way tax debt gets resolved — and the amount you end up paying each month is far more negotiable than most people realize.
Learn moreCurrently Not Collectible
When paying anything toward a tax balance would leave you unable to cover necessities, the IRS can shelve collection entirely.
Learn moreUnfiled & Back Tax Returns
Years behind is more common than you'd think, and it's almost never too late.
Learn moreFind out where you actually stand.
We'll pull your transcripts, tell you what's realistic, and give you a straight answer about whether this is the right path for you.