Offer in Compromise | IRS Tax Liability Settlement

An Offer in Compromise (OIC) is a settlement agreement between the IRS and the taxpayer. The IRS will accept a lower payment in lieu of your tax liability based on their calculations on your ability to pay the amount due.

Who is eligible for an Offer in Compromise?
Any taxpayer with a tax liability in eligible for an Offer in Compromise. There is no guarantee that the IRS will accept an OIC, but if you can prove that meeting your tax liability will be difficult, if not impossible, you have a good chance of having your OIC approved. The IRS will look at whether your expenses are so high relative to your income, that collecting the tax liability will be in doubt. 

How much will the IRS accept as a part of my Offer in Compromise?
The IRS does not have a set amount they will accept for OICs, rather, each case will be evaluated individually. They will factor in your current income, expenses, assets, and other liabilities. The settlement amount may be drastically lower than your original tax liability.

What is my first step towards an Offer in Compromise?
You must first make sure you are current with all tax filings. After that, you would work with your attorney/ tax professional to make sure your pre-qualify for an Offer in Compromise, before putting together your offer with all supporting forms and payments. 
​