Offer in Compromise

An Offer in Compromise (OIC) is one of the most powerful tools available for resolving significant tax debt with the IRS. This program allows qualifying taxpayers to settle their tax obligations for a fraction of what they actually owe.

How It Works

The IRS evaluates your ability to pay based on your income, expenses, asset equity, and overall financial situation. If they determine that collecting the full amount would cause undue hardship or is unlikely, they may accept a reduced settlement.

Types of Offers

Doubt as to Collectibility

You cannot pay the full amount before the collection statute expires

Doubt as to Liability

There's a legitimate dispute about the tax debt

Effective Tax Administration

Paying would create economic hardship

Requirements

To qualify, you must be current with all filing requirements, not be in an open bankruptcy proceeding, and have made all required estimated tax payments for the current year. Professional tax relief services can help evaluate your eligibility and prepare your application.

Professional Assistance

Given the complexity of OIC applications, many taxpayers benefit from working with experienced tax help professionals who understand the intricacies of the process and can maximize your chances of acceptance.

Key Statistics

• Only about 25% of OIC applications are accepted
• Professional help significantly improves acceptance chances
• The process typically takes 6-24 months

Examples

• A taxpayer owing $50,000 with limited income and assets might settle for $8,000
• A business owner with $100,000 in tax debt could potentially resolve it for $15,000