Offer in Compromise

Offer in Compromise for Small Business Owners

Running a small business is hard enough without IRS problems. If tax debt is weighing you down, an OIC could help you settle for less and start fresh.

Check If You Qualify

Why Small Business Owners Face Tax Problems

Small business owners face a perfect storm of tax obligations: income tax, self-employment tax, payroll taxes, and potentially sales tax. One bad quarter or unexpected expense can create a cascade of missed payments. The IRS doesn't distinguish between business struggles and willful neglect.

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 Small Business Owners

Payroll Tax Debt

Trust fund taxes (employee withholding) are a top IRS priority and can result in personal liability.

Cash Flow Crunches

When cash is tight, taxes often get deferred—then penalties and interest pile up.

Multiple Tax Types

Income tax, SE tax, payroll, sales tax—it's easy for one to slip through the cracks.

Business vs Personal

Commingled finances make it harder to track obligations and separate liability.

How Offer in Compromise Works for Small Business Owners

OIC Advantages for Small Business Owners:

  • 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 Small Business Owners 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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