Offer in Compromise: The Complete Guide to Settling IRS Debt for Less

At a Glance:

- Best for: Taxpayers who cannot pay their full tax debt without financial hardship

- Typical savings: 50-90% of total tax debt owed

- Processing time: 6-12 months on average (sometimes longer)

- Success rate: Approximately 40% approval rate

- Primary forms: Form 656 (Offer in Compromise), Form 433-A (Individual), Form 433-B (Business)

Drowning in tax debt with no way out? An offer in compromise (OIC) might be your lifeline. This program allows qualified taxpayers to settle their IRS debt for significantly less than the full amount owed—sometimes pennies on the dollar. While not everyone qualifies, those who do can potentially wipe out thousands or even hundreds of thousands in tax debt through this legitimate IRS program.

The IRS approved over 14,000 offers in compromise in fiscal year 2022, accepting around $158 million in settlements against nearly $1.6 billion in tax debt—meaning the average taxpayer paid approximately 10 cents for every dollar they owed. However, getting an OIC approved isn't easy. The IRS rejects most applications, often due to errors, missing information, or failing to meet the strict qualification criteria.

This guide walks you through everything you need to know about the offer in compromise program—from determining if you qualify to preparing a winning application. Let's break down how you can potentially settle your tax debt for less than you owe.

How an Offer in Compromise Works

The offer in compromise program exists because the IRS recognizes that collecting the full amount from some taxpayers would create extreme financial hardship or would be unfair and inequitable due to exceptional circumstances. Instead of forcing taxpayers into impossible situations, the IRS created this program as a legitimate way to resolve tax debts when full payment just isn't realistic.

Here's the basic concept: you offer to pay the IRS an amount based on what you can realistically afford, and the IRS agrees to forgive the remaining balance. Your offer amount must equal or exceed what the IRS calls your "reasonable collection potential" (RCP)—essentially what they believe they could reasonably collect from you over time.

The IRS calculates your RCP by looking at:

Your disposable monthly income (multiplied by 12 or 24, depending on your payment option)

The equity in your assets (home, vehicles, investments, etc.)

Future income potential

There are three grounds for an offer in compromise:

Doubt as to Collectibility: You can't pay the full amount (most common)

Doubt as to Liability: You don't actually owe the tax amount claimed

Effective Tax Administration: Special circumstances where paying would cause economic hardship or be unfair

When you submit an offer in compromise using Form 656, you must include a detailed financial statement (Form 433-A for individuals or Form 433-B for businesses) and a non-refundable application fee of $205 (unless you qualify for low-income certification). You'll also need to include an initial payment that varies based on your chosen payment option.

If the IRS accepts your offer, you must comply with all tax filing and payment requirements for the next five years, or the IRS can revoke the agreement and reinstate the original debt.

Who Qualifies for an Offer in Compromise

Not everyone with tax debt qualifies for an offer in compromise. The IRS has specific criteria you must meet before even considering your application:

You must be current on all tax filings: Any missing tax returns will result in automatic rejection. Make sure you've filed all required returns before applying.

You must be current on estimated tax payments: If you're self-employed or have other income without withholding, you must be current on your estimated quarterly tax payments for the current year.

You cannot be in an open bankruptcy proceeding: Active bankruptcy cases disqualify you from the OIC program.

You must have received at least one bill for the tax debt you're trying to settle.

Your financial situation must warrant an OIC: The IRS must determine that you cannot pay your tax debt in full through an installment agreement or other means without creating financial hardship.

Your offer must equal or exceed your Reasonable Collection Potential (RCP): The IRS will only accept offers that reflect what they believe they could collect from you before the collection statute expires.

The IRS also considers whether accepting your offer is in the best interest of both the government and the taxpayer. They look at factors such as your age, health, education, professional skills, and employment history when evaluating your future earning potential.

Pros and Cons of an Offer in Compromise

| Pros | Cons | |------|------| | Settle tax debt for significantly less than owed | Low approval rate (roughly 40%) | | Stop IRS collection activities once submitted | Lengthy process (6-12+ months) | | Fresh financial start after acceptance | Requires extensive financial disclosure | | Tax liens may be released after approval | Non-refundable $205 application fee | | Payment plans available for accepted offers | Must stay tax compliant for 5 years after acceptance | | Stops the collection statute of limitations while pending | Public record of tax settlement | | Potential to remove penalties and interest | Must include all tax periods with balances due |

An OIC offers tremendous relief if approved, but it's not without drawbacks. The process can be lengthy and intrusive, requiring you to share detailed financial information with the IRS. Additionally, your tax compliance history will be closely scrutinized for the next five years.

For many taxpayers with substantial tax debt, the potential benefits far outweigh the downsides. Settling a $50,000 tax debt for $5,000 could be life-changing, even with the rigorous application process.

How to Apply for an Offer in Compromise: Step by Step

Applying for an offer in compromise requires careful preparation and attention to detail. Here's a step-by-step guide to help you navigate the process:

Determine if you're eligible: Before spending time on the application, make sure you qualify by checking your status and reviewing the criteria above.

Gather your financial information: Collect recent bank statements, pay stubs, investment accounts, property valuations, vehicle information, loan statements, credit card bills, utility bills, medical expenses, and any other documents showing your income, assets, and expenses.

Complete Form 433-A (OIC) or 433-B (OIC): These forms detail your financial information, including income, expenses, assets, and liabilities. Be thorough and accurate—the IRS will verify this information.

Calculate your reasonable collection potential (RCP): This determines the minimum amount the IRS will likely accept. Calculate by adding:

- Monthly disposable income × 12 (lump-sum offer) or 24 (periodic payment offer) - Realizable value of your assets (equity in assets minus selling costs)

Complete Form 656: This is the actual offer in compromise application. You'll need to:

- Select your basis for the offer (doubt as to collectibility, doubt as to liability, or effective tax administration) - Choose your payment option (lump sum or periodic payment) - Determine your offer amount (must be at least your RCP)

Submit required payment with your offer: Include:

- $205 application fee (unless you qualify for the low-income certification) - Initial payment based on your selected payment option: - Lump sum: 20% of the offer amount - Periodic payment: First proposed monthly installment

Submit your complete package: Mail your forms, supporting documentation, and payment to the appropriate IRS address listed in the Form 656 booklet.

Respond promptly to IRS inquiries: After submission, an IRS specialist will review your application and may request additional information or clarification.

Wait for the IRS decision: This typically takes 6-12 months, though complex cases may take longer. While your offer is under consideration, the IRS will generally pause collection activities.

If accepted, follow the terms: Complete all required payments and maintain tax compliance for the next five years.

If rejected, consider your options: You can appeal within 30 days, submit a revised offer, or explore alternative resolution methods like installment agreements.

Remember, the IRS rejects many OIC applications due to simple errors or omissions. Taking the time to be thorough and accurate will significantly increase your chances of approval.

What Documentation You Need

Preparing a successful offer in compromise application requires substantial documentation. Here's a checklist of what you'll need to gather:

Financial Documentation:

[ ] Last 3 months of bank statements (all accounts)

[ ] Pay stubs or proof of income for the last 3 months

[ ] Documentation of self-employment income

[ ] Investment account statements

[ ] Retirement account statements

[ ] Life insurance policies (with cash value)

[ ] Real estate appraisals or property tax statements

[ ] Vehicle registrations and valuations

[ ] Loan statements (mortgage, car, student loans, etc.)

Expense Documentation:

[ ] Rent or mortgage statements

[ ] Utility bills (electricity, water, gas, internet)

[ ] Food and household supply expenses

[ ] Vehicle operating costs (gas, insurance, maintenance)

[ ] Medical bills and health insurance premiums

[ ] Child care expenses

[ ] Court-ordered payments (child support, alimony)

[ ] Life insurance premiums

Tax Documentation:

[ ] Copies of tax returns for all years with outstanding debt

[ ] IRS notices and letters regarding the tax debt

[ ] Previous communication with the IRS about your case

Business Documentation (if applicable):

[ ] Business bank statements

[ ] Profit and loss statements

[ ] Balance sheets

[ ] Accounts receivable and payable aging reports

[ ] Business asset inventory and valuations

Special Circumstances Documentation:

[ ] Medical records (for health-related hardships)

[ ] Disability determination letters

[ ] Documentation of extraordinary expenses

[ ] Proof of dependent care requirements

The more organized and complete your documentation, the smoother the process will be. If you're uncertain about what specific documents apply to your situation, consider getting your compliance report or consulting with a tax professional familiar with the offer in compromise program.

Why Offer in Compromise Applications Get Rejected

Understanding why the IRS rejects OIC applications can help you avoid common pitfalls. Here are the most frequent reasons for rejection and how to overcome them:

1. Insufficient Offer Amount

Problem: Your offered amount is below your reasonable collection potential (RCP). Solution: Calculate your RCP carefully using the IRS guidelines. Include all asset equity and appropriate income multipliers. If needed, increase your offer to match or exceed your RCP.

2. Missing or Incomplete Information

Problem: Forms are incomplete or required documentation is missing. Solution: Triple-check your application before submission. Use the checklist in the Form 656 booklet. Consider having someone else review your package for completeness.

3. Unfiled Tax Returns

Problem: You have missing tax returns for prior years. Solution: File all required tax returns before submitting your OIC. The IRS won't consider an offer if you have any unfiled returns.

4. Ability to Pay in Full

Problem: The IRS determines you can pay the full amount through an installment agreement without hardship. Solution: Clearly document and explain why paying the full amount would cause financial hardship. Include special circumstances like medical conditions, advanced age, or limited future earning potential.

5. Inaccurate Financial Information

Problem: Financial information doesn't match what the IRS can verify. Solution: Be completely honest and thorough in reporting all assets, income, and expenses. The IRS will verify this information and find discrepancies.

6. Insufficient Expense Documentation

Problem: You claimed expenses above the IRS Collection Financial Standards without proper justification. Solution: If your expenses exceed IRS standards, provide detailed documentation explaining why these expenses are necessary and reasonable.

7. Recent Asset Transfers

Problem: You transferred assets to others to avoid using them to pay your tax debt. Solution: Avoid transferring assets before applying. The IRS looks back several years and may count recently transferred assets in your RCP calculation.

8. Currently Not Collectible Status

Problem: If the IRS determines you can't pay anything, they may place you in Currently Not Collectible status rather than accepting an OIC. Solution: Demonstrate that some payment through an OIC is better for the IRS than waiting for your financial situation to improve.

9. Ongoing Compliance Issues

Problem: You aren't current on estimated tax payments or filings for the current year. Solution: Ensure you're fully compliant with all current filing and payment requirements before applying.

10. Previous OIC Default

Problem: You defaulted on a previous offer in compromise. Solution: If you previously defaulted, clearly explain the circumstances and why it won't happen again. You may need to wait before reapplying.

By addressing these potential issues before submitting your application, you'll significantly improve your chances of approval. Remember that details matter—even small mistakes can lead to rejection of what might otherwise be a qualifying offer.

Real Example Calculations

To help you understand how the IRS calculates reasonable collection potential (RCP) and offer amounts, let's look at three realistic taxpayer scenarios:

Example 1: Single Parent with Modest Income

Taxpayer Profile:

Single parent with two dependents

$48,000 annual income ($4,000 monthly)

Rents apartment ($1,500 monthly)

2015 car worth $6,000 (fully paid)

$2,000 in savings account

$50,000 IRS tax debt

5 years left on collection statute

RCP Calculation:

Monthly Income: $4,000

Allowable Monthly Expenses: $3,800 (rent, utilities, food, transportation, etc.)

Monthly Disposable Income: $200

Income Component: $200 × 12 months = $2,400 (lump sum offer)

Asset Component: $2,000 (savings) + $1,000 (car equity beyond exemption) = $3,000

Total RCP: $2,400 + $3,000 = $5,400

Acceptable Offer Amount: $5,400 (about 11% of the original $50,000 debt)

Example 2: Married Couple with Medical Hardship

Taxpayer Profile:

Married filing jointly, no dependents

Combined annual income of $85,000 ($7,083 monthly)

Home worth $300,000 with $270,000 mortgage balance

Medical condition requiring $1,200 monthly treatments not covered by insurance

$120,000 in retirement accounts

$18,000 car loan on vehicle worth $20,000

$95,000 IRS tax debt

7 years left on collection statute

RCP Calculation:

Monthly Income: $7,083

Allowable Monthly Expenses: $6,800 (including documented medical expenses)

Monthly Disposable Income: $283

Income Component: $283 × 24 months = $6,792 (periodic payment offer)

Asset Component: $30,000 (home equity) + $0 (retirement accounts exempt due to age) + $2,000 (car equity) = $32,000

Total RCP: $6,792 + $32,000 = $38,792

Acceptable Offer Amount: $39,000 (about 41% of the original $95,000 debt)

Example 3: Self-Employed Business Owner

Taxpayer Profile:

Self-employed consultant, married with one dependent

Fluctuating income averaging $120,000 annually ($10,000 monthly)

Home worth $450,000 with $350,000 mortgage balance

Business equipment worth $15,000

Investment account with $35,000

Two vehicles worth $45,000 combined with $20,000 in loans

$250,000 IRS tax debt (business and personal)

8 years left on collection statute

RCP Calculation:

Monthly Income: $10,000

Allowable Monthly Expenses: $8,500 (including business expenses)

Monthly Disposable Income: $1,500

Income Component: $1,500 × 24 months = $36,000 (periodic payment offer)

Asset Component: $100,000 (home equity) + $15,000 (business equipment) + $35,000 (investments) + $25,000 (car equity) = $175,000

Total RCP: $36,000 + $175,000 = $211,000

Acceptable Offer Amount: $211,000 (about 84% of the original $250,000 debt)

These examples illustrate how the IRS evaluates your ability to pay based on both income and assets. Notice that the percentage of debt settled varies significantly based on financial circumstances. Those with fewer assets and lower disposable income typically receive better settlement percentages.

The key takeaway: your offer amount must realistically reflect what the IRS could collect from you over time. A strategically calculated offer based on your true financial situation has the best chance of acceptance.

Alternatives If You Don't Qualify for an Offer in Compromise

If your offer in compromise application is rejected or you don't qualify, don't despair. Several alternative options can help you manage your tax debt:

Installment Agreement

An installment agreement allows you to pay your tax debt in monthly installments over time. The IRS offers several types:

Guaranteed Installment Agreements: For debts under $10,000

Streamlined Installment Agreements: For debts under $50,000

Partial Payment Installment Agreements: Pay less than full amount before collection statute expires

Non-Streamlined Installment Agreements: For larger debts requiring detailed financial analysis

The advantage is they're easier to obtain than an OIC, but you'll typically pay more of your total debt.

Currently Not Collectible (CNC) Status

If you can prove you cannot pay your tax debt without causing severe financial hardship, the IRS may place your account in Currently Not Collectible status. While this doesn't eliminate your debt, it temporarily halts collection actions. The IRS will periodically review your financial situation, and interest and penalties continue to accrue.

Penalty Abatement

The IRS may remove penalties if you can demonstrate reasonable cause for not paying or filing on time. Common qualifying reasons include natural disasters, serious illness, or bad advice from a tax professional. First-time penalty abatement may be available even without reasonable cause if you have a clean compliance history.

Bankruptcy

In some cases, certain tax debts can be discharged through bankruptcy. Generally, income taxes may be dischargeable if:

The taxes are over three years old

You filed the tax returns at least two years before filing bankruptcy

The IRS assessed the taxes at least 240 days before filing bankruptcy

You didn't commit fraud or willful evasion

Consult with a bankruptcy attorney who specializes in tax issues before pursuing this option.

Tax Debt Settlement Companies

Be extremely cautious with companies promising to settle your tax debt for "pennies on the dollar." Many charge high fees with poor results. If you need professional help, work with a licensed tax professional such as an Enrolled Agent, CPA, or tax attorney.

Statute of Limitations

The IRS generally has 10 years from the date of tax assessment to collect. In some cases, waiting out the collection statute may be an option, though the IRS can take aggressive collection actions during this period, including liens, levies, and seizures.

Amended Returns or Audit Reconsideration

If you believe the tax assessment is incorrect, you might consider filing amended returns or requesting audit reconsideration to reduce the underlying tax liability.

Each alternative has its own advantages and disadvantages. The best option depends on your specific financial situation, the amount of tax debt, and how much time remains on the collection statute. For personalized guidance on which approach might work best for you, get your compliance report.

DIY vs. Professional Help with Offer in Compromise

Deciding whether to tackle an offer in compromise on your own or hire professional help is a significant decision that can impact your chances of success. Let's compare both approaches:

DIY Approach

Costs:

Form 656 application fee: $205 (waived for low-income taxpayers)

Required initial payment with offer

No professional fees

Advantages:

Save money on professional fees ($2,000-$5,000+)

Complete control over your application

No one knows your financial situation better than you

Direct communication with the IRS

Disadvantages:

Higher risk of errors or miscalculations

May miss strategic opportunities to present your case

Limited knowledge of IRS internal procedures and precedents

Time-consuming learning curve

No professional advocate during negotiations

Best for:

Simple financial situations

Smaller tax debts

Those comfortable with tax forms and calculations

Individuals with time to research and learn the process thoroughly

Professional Help

Typical Costs:

Tax resolution firms: $3,000-$7,000 flat fee

CPAs: $250-$500 per hour

Tax attorneys: $350-$600 per hour

Enrolled Agents: $150-$300 per hour

Plus the same IRS fees as DIY

Advantages:

Experience with IRS acceptance criteria and negotiation tactics

Knowledge of how to properly value assets and calculate RCP

Higher likelihood of first-time acceptance

Representation during IRS communications and negotiations

Time savings and reduced stress

May identify opportunities you might miss

Disadvantages:

Significant professional fees

Quality varies greatly between providers

Some firms make unrealistic promises

May not be worth the cost for simple cases or small tax debts

Best for:

Complex financial situations

Large tax debts ($50,000+)

Business owners with multiple issues

Those who have previously had an OIC rejected

People who value peace of mind and professional guidance

Finding the Right Professional

If you decide to hire help, look for:

Proper credentials: Enrolled Agents, CPAs, or tax attorneys have legal rights to represent you before the IRS.

Experience specific to offers in compromise: Ask about their success rate and number of OICs they've handled.

Realistic expectations: Be wary of anyone promising specific settlement amounts or "pennies on the dollar" results without reviewing your finances.

Clear fee structure: Understand exactly what services are included and if there are any additional costs.

Reviews and references: Check independent review sites and ask for references from similar cases.

Personal compatibility: You'll be sharing sensitive financial information, so trust and communication are essential.

For many taxpayers, a middle-ground approach works best: get an initial consultation with a professional to assess your situation and likelihood of success, then decide whether to proceed on your own or with professional assistance based on the complexity of your case and potential savings.

Frequently Asked Questions About Offer in Compromise

How long does it take for the IRS to process an offer in compromise?

The IRS typically takes 6-12 months to process an offer in compromise application. Complex cases can take longer, sometimes up to 24 months. During this time, collection activities are generally suspended, and the collection statute of limitations is extended.

What percentage of tax debt does the IRS typically settle for?

The IRS doesn't use a standard percentage. Each case is evaluated individually based on the taxpayer's ability to pay. Settlements typically range from 1-50% of the original debt, with the average accepted offer being around 20% of the original amount owed. Your financial situation, not the amount of your debt, determines your settlement amount.

Can I negotiate my offer amount with the IRS?

Yes. If the IRS counter-offers or rejects your initial offer, you can negotiate. Provide additional information about financial hardships or special circumstances that might justify a lower payment. You can also appeal a rejection within 30 days using Form 13711.

What happens to tax liens when my offer is accepted?

When your offer is accepted and you've fulfilled all the terms (including making all required payments), the IRS will release any federal tax liens. This typically occurs 30-60 days after your final payment. However, the release of liens doesn't automatically remove them from your credit report—you may need to work with credit bureaus separately.

Can I apply for an offer in compromise if I've been rejected before?

Yes, you can reapply after a rejection. However, unless your financial circumstances have significantly changed or you're addressing the specific reasons for the previous rejection, you'll likely face the same outcome. Wait until you can present a substantially different case or offer amount.

What's the difference between a doubt as to collectibility and effective tax administration offer?

A doubt as to collectibility offer is based on inability to pay the full amount. An effective tax administration offer applies when you can technically pay the full amount, but doing so would create economic hardship or be unfair due to exceptional circumstances (such as advanced age, serious illness, or a situation where the tax arose through no fault of your own).

Does an offer in compromise affect my credit score?

The offer itself doesn't directly impact your credit score. However, tax liens may have already affected your credit. Once your offer is accepted and tax liens are released, your credit score may improve over time. The settlement will not be reported to credit bureaus as a settlement of debt like credit card settlements often are.

Can I include both personal and business taxes in one offer?

Yes. If you're personally liable for both individual and business taxes (such as employment taxes for a sole proprietorship or partnership), you can include all tax liabilities in a single offer. Use Form 656 for personal taxes and Form 433-B along with your personal Form 433-A for business-related taxes.

What if my financial situation changes while my offer is pending?

You must inform the IRS of any significant changes to your financial situation while your offer is being considered. This includes increases in income, new assets, inheritances, or other financial windfalls. Failure to disclose such changes could result in your offer being rejected or later revoked if already accepted.

Do I have to continue making payments on an installment agreement while my offer is pending?

The IRS generally doesn't require you to continue installment agreement payments while your offer is being considered. However, interest and penalties continue to accrue. If your offer is rejected, you'll need to resume payments on your installment agreement or make other arrangements.

What happens if I default on an accepted offer in compromise?

If you default on an accepted offer by missing payments or failing to remain compliant with filing and payment requirements for the following five years, the IRS can revoke the agreement and reinstate the original tax debt, minus any payments made. All the forgiven debt comes back, often with additional penalties and interest.

Can I pay my offer amount all at once?

Yes, the IRS offers a lump-sum payment option where you pay 20% of the offer amount with your application and the remaining 80% upon acceptance. This option typically results in a lower total offer amount since your future income is multiplied by 12 months instead of 24 months used for periodic payment offers.

Your Next Steps

Now that you understand how the offer in compromise program works, here are concrete actions you can take today to move forward:

Assess your eligibility: Review your tax compliance history to ensure all returns are filed and you meet the basic criteria for an OIC. Check your status to confirm you're current on all required filings.

Gather your financial documents: Start collecting bank statements, pay stubs, property valuations, and expense records. Organizing these now will save time later.

Calculate your reasonable collection potential: Use the guidelines in this article to estimate your RCP. This will help you determine if an OIC is realistic for your situation and what offer amount might be acceptable.

Download the necessary forms: Get the Form 656 Booklet from IRS.gov, which contains Form 656 (Offer in Compromise) and Form 433-A (Collection Information Statement).

Consider a professional consultation: Even if you plan to submit your offer yourself, an initial consultation with a tax professional can provide valuable insight about your specific situation.

Review alternatives: If your initial calculations suggest you might not qualify for an OIC, research the alternative programs mentioned in this article to find another solution that fits your circumstances.

Create a contingency plan: Develop a backup plan in case your offer is rejected. This might include requesting an installment agreement or exploring other resolution options.

Set aside funds for the application fee and initial payment: Be prepared financially to submit your offer when you're ready.

Request your tax transcripts: Order your tax transcripts from the IRS to verify the exact amount you owe, including penalties and interest.

Make a decision timeline: Set a deadline for yourself to either submit an OIC application or pursue an alternative resolution strategy.

Remember, resolving tax debt is a process, not an event. Taking consistent steps forward is the key to success. If you're feeling overwhelmed, Proof.tax offers resources to help you understand your options and create a personalized plan for tax resolution.

excerpt: Learn how to settle IRS tax debt for less through the Offer in Compromise program. Our guide covers qualification, application process, and what to expect. read_time: 15 minutes meta_title: Offer in Compromise: Complete Guide to IRS Tax Debt Settlement meta_description: Discover how to settle your IRS tax debt for less with an Offer in Compromise. Learn qualification criteria, application process, and get expert tips for approval.

Offer in Compromise: The Complete Guide to Settling IRS Debt for Less

How an Offer in Compromise Works

Who Qualifies for an Offer in Compromise

Pros and Cons of an Offer in Compromise

How to Apply for an Offer in Compromise: Step by Step

What Documentation You Need

Financial Documentation:

Expense Documentation:

Tax Documentation:

Business Documentation (if applicable):

Special Circumstances Documentation:

Why Offer in Compromise Applications Get Rejected

1. Insufficient Offer Amount

2. Missing or Incomplete Information

3. Unfiled Tax Returns

4. Ability to Pay in Full

5. Inaccurate Financial Information

6. Insufficient Expense Documentation

7. Recent Asset Transfers

8. Currently Not Collectible Status

9. Ongoing Compliance Issues

10. Previous OIC Default

Real Example Calculations

Example 1: Single Parent with Modest Income

Example 2: Married Couple with Medical Hardship

Example 3: Self-Employed Business Owner

Alternatives If You Don't Qualify for an Offer in Compromise

Installment Agreement

Currently Not Collectible (CNC) Status

Penalty Abatement

Bankruptcy

Tax Debt Settlement Companies

Statute of Limitations

Amended Returns or Audit Reconsideration

DIY vs. Professional Help with Offer in Compromise

DIY Approach

Professional Help

Finding the Right Professional

Frequently Asked Questions About Offer in Compromise

How long does it take for the IRS to process an offer in compromise?

What percentage of tax debt does the IRS typically settle for?

Can I negotiate my offer amount with the IRS?

What happens to tax liens when my offer is accepted?

Can I apply for an offer in compromise if I've been rejected before?

What's the difference between a doubt as to collectibility and effective tax administration offer?

Does an offer in compromise affect my credit score?

Can I include both personal and business taxes in one offer?

What if my financial situation changes while my offer is pending?

Do I have to continue making payments on an installment agreement while my offer is pending?

What happens if I default on an accepted offer in compromise?

Can I pay my offer amount all at once?

Your Next Steps

Need help with your IRS situation?

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