Offer in Compromise
Settle your IRS tax debt for less than you owe. An OIC could be your fresh start.
Check If You QualifyWhat Is an Offer in Compromise?
An Offer in Compromise (OIC) is an agreement between you and the IRS that allows you to settle your tax debt for less than the full amount you owe. It's a legitimate program designed for taxpayers who genuinely cannot pay their full tax liability.
The IRS will consider accepting an OIC when the amount offered represents the most they can reasonably expect to collect within a given timeframe. This is determined by a careful evaluation of your income, expenses, assets, and future earning potential.
For many taxpayers, an OIC provides a realistic path to resolving what might otherwise be an impossible debt burden.
How the OIC Process Works
Financial Analysis
We review your complete financial picture including income, expenses, assets, and liabilities to determine your reasonable collection potential.
Offer Calculation
Based on IRS formulas, we calculate the minimum offer amount likely to be accepted and develop a strategy for your application.
Application Preparation
We prepare and submit Form 656, Form 433-A (OIC), and all supporting documentation with the required application fee and initial payment.
IRS Negotiation
We communicate with the IRS on your behalf, respond to requests for additional information, and negotiate for the best possible outcome.
Resolution
Once accepted, you make the agreed payment(s) and your remaining tax debt is forgiven. You get a true fresh start.
Do You Qualify for an Offer in Compromise?
The IRS considers several factors when evaluating OIC applications. You may be a good candidate if:
You May Qualify If:
- You owe more than you can realistically pay
- Your income and assets are limited
- You've experienced financial hardship
- All tax returns have been filed
- You're current on estimated tax payments
- You're not in bankruptcy proceedings
You May Not Qualify If:
- You can pay the full amount through installments
- You have significant assets or equity
- You have unfiled tax returns
- You're in an open bankruptcy case
- You have high disposable income
- Your financial situation is temporary
Not sure if you qualify? Our free assessment can help you understand your options.
Take Free AssessmentBenefits of an Offer in Compromise
Significant Savings
Settle your debt for a fraction of what you owe, sometimes as little as 10-20 cents on the dollar.
Stop Collections
IRS collection actions are suspended while your offer is being evaluated, giving you breathing room.
Complete Resolution
Once accepted and paid, your remaining tax debt is fully forgiven. No more IRS debt hanging over you.
Fresh Start
Move forward with your life without the burden of unmanageable tax debt weighing you down.
Frequently Asked Questions
How long does the OIC process take?
The IRS typically takes 6-12 months to review an Offer in Compromise application. Complex cases may take longer. During this time, collection actions are generally suspended.
How much does it cost to apply for an OIC?
The IRS charges a $205 application fee plus an initial payment. If you choose a lump sum offer, you must include 20% of the total offer amount with your application. Low-income taxpayers may qualify for a fee waiver.
What happens if my offer is rejected?
If rejected, you have 30 days to appeal the decision. You may also submit a new offer with additional information or explore other resolution options like an installment agreement or currently not collectible status.
Will I have to pay taxes on the forgiven amount?
Generally, the forgiven tax debt from an accepted OIC is not considered taxable income. However, you should consult with a tax professional about your specific situation.
What are my obligations after an OIC is accepted?
You must remain compliant with all tax filing and payment requirements for 5 years after acceptance. This means filing all returns on time and paying all taxes owed. Failure to comply can result in the offer being defaulted.
Can I apply for an OIC myself?
Yes, you can apply on your own. However, the process is complex and the IRS rejects many applications. Working with a qualified tax professional significantly increases your chances of success and ensures your offer is calculated correctly.
OIC for Your Situation
Different professions and circumstances face unique tax challenges. Find guidance specific to you.
Self-Employed
Freelancers and independent workers
Small Business Owners
Business owners with tax debt
1099 Contractors
Independent contractors
Gig Workers
Uber, DoorDash, Instacart drivers
Real Estate Agents
Agents and brokers
Restaurant Owners
Food service businesses
Construction Contractors
Builders and tradespeople
Truck Drivers
Owner-operators
Healthcare Workers
Nurses, doctors, travel staff
Divorced Individuals
Post-divorce tax issues
Veterans
Military veterans
Commission Sales
Sales professionals
Not sure if OIC is right for you? Compare OIC vs Installment Agreement
Ready to Explore Your Options?
Take our free 2-minute assessment to find out if an Offer in Compromise or other tax relief program may be right for your situation.
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