What is an Offer in Compromise?
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Offer in Compromise — Settle IRS Tax Debt for Less Than You Owe

If you owe the IRS more than you can realistically pay, an Offer in Compromise (OIC) may allow you to settle your entire tax debt for a significantly reduced amount. The IRS accepts OICs for taxpayers experiencing financial hardship or who cannot pay their balance without severe economic strain.

Internal Tax Resolution helps individuals and businesses nationwide qualify for OICs, prepare the required documents, and negotiate directly with the IRS for the lowest settlement legally possible.

Which Option is Best For Your Tax Problem? 

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  • Offer in Compromise

  • Fully pay the tax owed

  • File unfiled returns to replace Substitute for Returns (SFR's)

  • Dispute the tax on technical grounds

  • Currently Not Collectable

  • Installment Agreements

  • Penalty Abatement

  • Discharging taxes in bankruptcy

  • Innocent Spouse

  • Expiration of the Collection Statute

What Is an Offer in Compromise (OIC)?

An Offer in Compromise is an IRS tax relief program that allows eligible taxpayers to settle their IRS debt for less than the full balance owed.

If approved:

  • Your remaining tax balance is forgiven

  • Collections stop immediately

  • Wage garnishments end

  • Bank levies are removed

  • Tax liens may be resolved

The IRS only accepts OICs when they believe the offered amount is the most they can reasonably expect to collect.

Why the IRS Accepts OICs

The IRS understands that not every taxpayer can pay their full tax balance. When you truly cannot pay the amount owed — and the IRS confirms this through financial analysis — they may settle for a lesser amount.

An OIC is approved when:

  • Your income is low compared to necessary expenses

  • Your assets cannot cover the debt

  • Paying the full balance would cause financial hardship

  • Your future earning potential is limited

  • Your reasonable collection potential (RCP) is below the tax balance

Our job is to document and present your financial situation correctly, proving that your offer meets IRS standards.

Consequences of Ignoring IRS Tax Debt Instead of Applying for an OIC

If you do not address your IRS debt, the IRS may take increasingly aggressive action:

  • Wage garnishment

  • Bank account levies

  • Federal tax liens

  • Seizure of assets in extreme cases

  • Growing penalties and interest

  • Loss of future refunds

Applying for an OIC provides immediate protection during the review process.

Types of Offer in Compromise Programs

✔ Doubt as to Collectability (Most Common)

You cannot afford to pay the full amount.

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✔ Doubt as to Liability

You do not believe the amount the IRS claims is accurate.

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✔ Effective Tax Administration (Hardship Case)

You technically could pay, but doing so would create unfair financial hardship.

Internal Tax Resolution determines which category you qualify for to maximize your chance of approval.

How Internal Tax Resolution Helps You Qualify for an OIC

OIC approval requires extensive documentation, precise calculations, and strategic presentation. We handle every step for you.

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We provide:

  • IRS transcript review

  • Detailed financial analysis

  • Calculation of your reasonable collection potential (RCP)

  • Preparation of Form 656 and financial statements (433-A OIC / 433-B OIC)

  • Communication with IRS officers on your behalf

  • Negotiation for the lowest settlement amount

  • Appeal support if your offer is initially rejected

Submitting an Offer in Compromise without professional support often results in denial. Our experience greatly increases your chances of approval.

Our Offer in Compromise Process

1. Free OIC Eligibility Evaluation

We identify whether an OIC is realistically achievable based on your financial condition.

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2. Stop IRS Collections Immediately

Once we submit your OIC, most collection activity must pause during review.

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3. Prepare All IRS Financial Documentation

We complete IRS forms and gather supporting financial records.

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4. Submit Your Offer to the IRS

Our team handles the submission and tracks the review process.

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5. Negotiate & Respond to IRS Requests

We communicate directly with IRS examiners to defend your offer.

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6. Final Approval and Compliance

Once accepted, you must remain compliant moving forward — we guide you on how.

How the Offer in Compromise Works

The IRS Offer in Compromise program provides taxpayers who owe the IRS more that they could ever afford to pay on their own. This program is an opportunity to pay back a small amount as a full and final settlement. Our tax attorneys will assist with helping you reduce your tax debt owed and apply this program to as a tax relief or tax resolution to your tax debt. The OIC program also allows taxpayers who do not agree that they owe the tax or feel that the tax has been incorrectly calculated, a chance to file an Offer in Compromise and have their tax debt forgiven and reconsidered. 

 

This program offers taxpayers a fresh start with all back tax liabilities settled within the Offer in Compromise. All federal tax liens are released upon IRS acceptance of an Offer in Compromise along with payment of the amount offered. Taxpayers can compromise all types of IRS taxes, penalties and interest, this includes payroll taxes. If the taxpayer qualifies for the Offer in Compromise program, they will be able to save thousands of dollars in taxes, penalties, as well as interest. Give our tax attorneys a call today at one of our 43 local offices across the U.S. to assist you. Most Offer in Compromise programs that are done with an attorney are less than going about it on your own. Call us today for a Free Consultation!

What Makes an OIC Successful?

The IRS evaluates:

  • Monthly income

  • Allowable expenses

  • Assets and equity

  • Age and future earning potential

  • Collection statute expiration date

  • Household size

  • Financial hardship

The stronger and clearer your documentation, the better your chances — which is why professional help is vital.

Client Success Example

“A client in Indiana owed $78,000 in IRS back taxes after several difficult years. After reviewing her financial situation, Internal Tax Resolution prepared an Offer in Compromise. The IRS accepted a settlement of $3,600, resolving her entire debt and stopping all collection activity.”

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These results are common when a case is properly documented.

Get Help Settling Your IRS Debt Today

An Offer in Compromise may allow you to settle your IRS tax debt for a fraction of what you owe — but only if you qualify and present your case correctly. Our team has the experience needed to negotiate the lowest possible settlement.

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You may be closer to a fresh financial start than you think.

Request a FREE Consultation!

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