IRS Offer in Compromise (OIC)
Settle Federal Tax Liability for Less Than Full Balance Owed
An Offer in Compromise (OIC) allows qualifying taxpayers with genuine financial hardship to negotiate a binding settlement with the IRS under Doubt as to Collectibility, Doubt as to Liability, or Effective Tax Administration.
How the IRS Evaluates an Offer in Compromise
The IRS does not accept settlement offers simply because a taxpayer prefers not to pay. Every offer is evaluated against strict statutory criteria to verify that the offered amount equals or exceeds the taxpayer's Reasonable Collection Potential (RCP).
1. Doubt as to Collectibility
Most common grounds: the taxpayer's assets and projected future income are insufficient to pay the full tax balance within the Collection Statute Expiration Date (CSED).
2. Doubt as to Liability
There is a genuine legal dispute regarding the existence or correct amount of the assessed tax debt under the Internal Revenue Code.
3. Effective Tax Admin (ETA)
Liability is clear and collection is possible, but full payment would create severe economic hardship or would be unfair and inequitable due to exceptional circumstances.
You must have filed all mandatory federal tax returns, made all current estimated tax payments, and if you are a business owner with employees, made all current federal tax deposits prior to submitting Form 656. You cannot be in open bankruptcy proceedings.
Key Advantages for Your Business
Rigorous RCP Assessment
We calculate your Net Realizable Equity in assets plus future disposable income to determine if the IRS will accept an offer.
Halt Wage & Bank Levies
Filing a processable OIC generally suspends IRS levy action while the offer is under formal investigation.
Clean Slate Compliance
Once paid in full and conditions met for 5 years, tax liens are released and past balances are extinguished.
What You Receive
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