Educational & Process
Understanding the IRS Offer in Compromise: Your Complete Guide
Take control of your tax debt today. Our step-by-step guide helps you understand if an Offer in Compromise is right for you.
Free Qualification Check Consultation • Expert Guidance Available
Is an Offer in Compromise Right for You?
The IRS Offer in Compromise program helps taxpayers settle their tax debt for less than the full amount owed. Our clients typically save between 67% – 91% on their tax debt through this program. However, not everyone qualifies. Take our free assessment to understand your options.
Free Qualification Check Consultation • Expert Guidance Available
Understanding the OIC Process
Filing an Offer in Compromise can seem overwhelming, but we’ve helped thousands of taxpayers successfully navigate this process. Here’s what you need to know:
Step 1: Determining Eligibility
Before starting your OIC application, you need to meet specific IRS criteria. The IRS considers:
- Your ability to pay
- Income and expenses
- Asset equity
- Current tax filing status
Our free qualification consultation helps you understand if you meet these criteria before investing time in the application process.
Free assessment
Step 2: Calculating Your Offer Amount
The IRS has strict formulas for determining acceptable offer amounts. Our OIC calculator helps you understand:
- What the IRS might accept
- How much you could save
- Payment options available
- Timeline for resolution
See how much you might be able to save
Step 3: Preparing Your Application
A successful OIC application requires:
Who Are the Attorneys Behind These Life-Changing Results?
Jeffrey B. Irby, Lead Tax Attorney
- 20+ years of IRS negotiation experience
- Specialized in Offer in Compromise
- Licensed in all 50 states
Required Documentation
We’ll guide you through gathering everything you need:
- Tax returns and financial statements
- Income verification
- Asset documentation
- Monthly expense records
Application Forms
Understanding which forms you need and how to complete them:
- Form 656 (Offer in Compromise)
- Form 433-A (Collection Information Statement)
- Supporting documentation requirements
Common OIC Mistakes to Avoid
Many OIC applications are rejected due to preventable errors. Here are the most common pitfalls:
- Incorrect Offer Amount Understanding how to calculate an acceptable offer is crucial. The IRS uses specific formulas to determine the minimum amount they’ll accept.
- Missing Documentation Your application must include all required documentation. We provide a complete checklist to ensure nothing is missed.
- Inaccurate Financial Information The IRS thoroughly reviews all financial information. Any discrepancies can lead to rejection.
Expert Support Available
While you can submit an OIC yourself, having expert guidance significantly increases your chances of success. Our team offers:
No Obligation • 100% Confidential • Available 24/7
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Professional Guidance
Our tax experts can:
- Review your qualification status
- Help calculate an acceptable offer
- Guide you through documentation
- Review your application before submission
Complete Service Available
If you prefer, we can handle your entire OIC process:
- Full application preparation
- IRS negotiations
- Ongoing support until resolution
Free Consultation • No Obligation
Frequently Asked Questions
An Offer in Compromise is a program offered by the IRS that allows taxpayers to settle their tax debt for less than the full amount owed. Here's how it works:
- Financial Analysis: The IRS evaluates your income, expenses, assets, and liabilities to determine if you qualify for a reduced settlement.
- Application Submission: Our attorneys prepare and submit the required Form 656 (OIC application) along with supporting documents.
- IRS Review: The IRS reviews your application to assess whether accepting the offer is in their interest. This can include verifying your financial information and ensuring all required tax filings are up to date.
- Negotiation: Our team negotiates with the IRS to secure the best possible terms for your offer.
- Acceptance or Rejection: If accepted, you’ll settle your debt for the agreed amount. If rejected, you may appeal the decision or explore other resolution options.
The IRS has strict criteria, but with our expertise, we increase your chances significantly. Here’s why:
- Success Rate: We’ve achieved a 95% acceptance rate for our clients.
- Proper Preparation: Our attorneys ensure your financial disclosures are accurate and compelling.
- Compliance Assurance: We ensure all your required tax returns are filed and payments are current, which is critical for approval.
- Expert Negotiation: Former IRS attorneys on our team understand what the IRS looks for in an acceptable offer.
While overall IRS acceptance rates hover around 30-40%, our tailored approach dramatically improves your odds.
The Offer in Compromise process typically takes 6-9 months, depending on various factors:
- Initial Review: The IRS reviews your application and financial information within 30-60 days of submission.
- Investigation Period: The IRS conducts a detailed analysis of your finances, which can take 4-6 months.
- Decision Phase: The IRS makes a final decision or requests additional information.
- Appeals (if needed): If your offer is initially rejected, the appeal process can add another 2-3 months.
We keep you updated at every step, ensuring your case moves quickly.
To submit an OIC, you’ll need to provide detailed financial information, including:
- Income Documentation: Recent pay stubs, self-employment income statements, or other income records.
- Expense Records: Monthly bills such as rent, utilities, insurance, and medical expenses.
- Asset Details: Bank account statements, retirement accounts, property valuations, and vehicle details.
- Tax Filings: Copies of all required tax returns for the applicable years.
- Additional Forms: IRS Form 433-A (Collection Information Statement) or Form 433-B for businesses.
Our team will guide you through gathering these documents and ensure everything is accurate and complete.
The amount you save depends on your financial situation. On average, our clients reduce their tax debt by 85% or more. Here's what determines your savings:
- Reasonable Collection Potential (RCP): The IRS calculates how much they can reasonably expect to collect based on your assets, income, and expenses.
- Offer Amount: If the calculated RCP is lower than your total tax debt, the IRS may accept an offer for that amount.
- Case Examples:
- A client with $127,000 in tax debt settled for $12,000.
- Another client reduced $85,000 to just $7,500.
Every case is unique, but we focus on achieving the maximum savings possible for you.
Recent Success Stories
"The guidance helped me understand exactly what the IRS was looking for. My offer was accepted, reducing my $87,000 tax debt to just $12,000."
Trusted Results Since 2010
- BBB A+ Rating
- American Bar Association Member
- National Association of Tax Professionals
- Featured in Forbes, Bloomberg, and WSJ
- 4.9/5 Client Satisfaction Rating (Based on 1,200+ Reviews)
Frequently Asked Questions
An Offer in Compromise is a program offered by the IRS that allows taxpayers to settle their tax debt for less than the full amount owed. Here's how it works:
- Financial Analysis: The IRS evaluates your income, expenses, assets, and liabilities to determine if you qualify for a reduced settlement.
- Application Submission: Our attorneys prepare and submit the required Form 656 (OIC application) along with supporting documents.
- IRS Review: The IRS reviews your application to assess whether accepting the offer is in their interest. This can include verifying your financial information and ensuring all required tax filings are up to date.
- Negotiation: Our team negotiates with the IRS to secure the best possible terms for your offer.
- Acceptance or Rejection: If accepted, you’ll settle your debt for the agreed amount. If rejected, you may appeal the decision or explore other resolution options.
The IRS has strict criteria, but with our expertise, we increase your chances significantly. Here’s why:
- Success Rate: We’ve achieved a 95% acceptance rate for our clients.
- Proper Preparation: Our attorneys ensure your financial disclosures are accurate and compelling.
- Compliance Assurance: We ensure all your required tax returns are filed and payments are current, which is critical for approval.
- Expert Negotiation: Former IRS attorneys on our team understand what the IRS looks for in an acceptable offer.
While overall IRS acceptance rates hover around 30-40%, our tailored approach dramatically improves your odds.
The Offer in Compromise process typically takes 6-9 months, depending on various factors:
- Initial Review: The IRS reviews your application and financial information within 30-60 days of submission.
- Investigation Period: The IRS conducts a detailed analysis of your finances, which can take 4-6 months.
- Decision Phase: The IRS makes a final decision or requests additional information.
- Appeals (if needed): If your offer is initially rejected, the appeal process can add another 2-3 months.
We keep you updated at every step, ensuring your case moves quickly.
To submit an OIC, you’ll need to provide detailed financial information, including:
- Income Documentation: Recent pay stubs, self-employment income statements, or other income records.
- Expense Records: Monthly bills such as rent, utilities, insurance, and medical expenses.
- Asset Details: Bank account statements, retirement accounts, property valuations, and vehicle details.
- Tax Filings: Copies of all required tax returns for the applicable years.
- Additional Forms: IRS Form 433-A (Collection Information Statement) or Form 433-B for businesses.
Our team will guide you through gathering these documents and ensure everything is accurate and complete.
The amount you save depends on your financial situation. On average, our clients reduce their tax debt by 85% or more. Here's what determines your savings:
- Reasonable Collection Potential (RCP): The IRS calculates how much they can reasonably expect to collect based on your assets, income, and expenses.
- Offer Amount: If the calculated RCP is lower than your total tax debt, the IRS may accept an offer for that amount.
- Case Examples:
- A client with $127,000 in tax debt settled for $12,000.
- Another client reduced $85,000 to just $7,500.
Every case is unique, but we focus on achieving the maximum savings possible for you.