Offer in Compromise

Offer in Compromise for Divorced Individuals

Divorce often leaves both parties with unexpected tax obligations. An Offer in Compromise could help you settle for less.

Check If You Qualify

Why Divorced Individuals Face Tax Problems

Divorce creates financial chaos, and taxes often get caught in the crossfire. Joint tax debt may become your sole responsibility. Support payments have tax implications. Assets divided may trigger capital gains. And while you're dealing with lawyers and life changes, estimated payments get missed.

The good news? An Offer in Compromise lets you settle your tax debt for less than you owe. The IRS looks at your Reasonable Collection Potential (RCP)—what they think they can realistically collect from you based on your income, expenses, and assets.

Common Tax Issues for Divorced Individuals

Joint Liability

Tax debt from married years may become your responsibility alone.

Asset Division Taxes

Splitting retirement accounts or selling the house can trigger surprise taxes.

Support Payment Rules

Alimony and child support have specific (and changed) tax implications.

Innocent Spouse Issues

You may be liable for your ex's tax misdeeds on joint returns.

How Offer in Compromise Works for Divorced Individuals

OIC Advantages for Divorced Individuals:

  • Variable income can lower your "future income" calculation
  • Business expenses reduce your disposable income
  • Equipment and tools may have minimal equity value
  • Economic downturns in your industry support hardship claims
  • Settle for a fraction of what you owe

What You'll Need:

  • All tax returns filed (we can help with this)
  • Current on estimated tax payments
  • Detailed income and expense documentation
  • Financial records for the past 12 months
  • $205 application fee + 20% of offer amount

Other Options for Divorced Individuals Tax Debt

Installment Agreement

If you don't qualify for an OIC, a payment plan lets you pay your full debt over time in manageable monthly amounts.

  • Stops collection actions
  • Predictable payments
  • Easier to qualify

Currently Not Collectible

If you can't afford any payments right now, CNC status pauses collections until your situation improves.

  • No payments required
  • Collections paused
  • Time to stabilize

Penalty Abatement

If this is your first tax issue or you have reasonable cause, you may qualify to have penalties removed.

  • Reduce total owed
  • First-time relief available
  • Reasonable cause options

Not sure which option is best? Compare OIC vs Installment Agreement

Ready to Resolve Your Tax Situation?

Take our free 2-minute assessment to understand your options.

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