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Offer in Compromise
Settle Your IRS Debt for Less Than the Full Amount Owed
An Offer in Compromise is one of the most misrepresented services in the tax industry. We evaluate your eligibility based on your actual transcripts and financial position — not what sounds best in a sales call.
What Is an Offer in Compromise?
An Offer in Compromise (OIC) is an agreement between a taxpayer and the IRS to settle a tax liability for less than the full amount owed. The IRS accepts an OIC when it believes the offered amount represents the most it can realistically collect before the 10-year Collection Statute Expiration Date (CSED).
The IRS evaluates OICs based on the taxpayer's Reasonable Collection Potential (RCP) — the sum of net realizable equity in assets and future income. The minimum offer must equal or exceed the RCP.
An OIC is not appropriate for every taxpayer with IRS debt. If your RCP equals or exceeds your tax liability, an installment agreement or Currently Not Collectible status is likely a better fit.
Three Grounds for an OIC
Doubt as to Collectibility
The most common basis. The taxpayer cannot pay the full liability before the collection statute expires. The IRS evaluates income, expenses, and assets using Form 433-A (OIC) or Form 433-B (OIC).
Doubt as to Liability
There is a genuine dispute about whether the assessed tax is legally owed. This is not a substitute for an audit reconsideration or Tax Court petition — it applies when there is a legitimate factual or legal dispute about the underlying liability.
Effective Tax Administration
The tax is legally owed and collectible, but collection would create economic hardship or be inequitable given exceptional circumstances. This is the most difficult basis to establish.
Eligibility Requirements
You must:
- Have filed all required tax returns
- Be current on estimated tax payments
- Not be in an open bankruptcy proceeding
- Have made required federal tax deposits (businesses)
You are ineligible if:
- You have unfiled tax returns
- You are in an open bankruptcy proceeding
- You have not made required estimated payments
- Your RCP equals or exceeds your tax debt
The OIC Process
- 1
Paid Tax Resolution Investigation
We obtain your IRS transcripts, verify compliance, calculate your RCP, and determine whether an OIC is your best option.
- 2
Financial Package Preparation
Complete Form 433-A (OIC) or 433-B (OIC) with supporting documentation. The IRS scrutinizes every line.
- 3
Form 656 Submission
Submit the OIC with the $205 application fee and required initial payment (20% of lump-sum offer or first periodic payment).
- 4
IRS Review (6–12 months)
Collection activity is suspended. The IRS may request additional documentation. The collection statute is tolled during review.
- 5
Acceptance or Appeal
If accepted, the taxpayer must remain compliant for five years. If rejected, we have 30 days to appeal to the IRS Office of Appeals.
OIC Pre-Qualifier Tool
Use our interactive tool to estimate your Reasonable Collection Potential and whether an OIC may be appropriate for your situation.
Open the pre-qualifier →Key IRS Forms
Is an OIC Right for You?
We evaluate your eligibility based on your actual IRS transcripts and financial position — not what sounds best in a sales call. Start with a paid Tax Resolution Investigation.
No resolution strategy is recommended until we have reviewed your transcripts and financial position. Eligibility depends on your specific facts.