Offer in Compromise (OIC)
Settle your IRS tax debt for less than the full amount you owe
What is an Offer in Compromise?
An Offer in Compromise (OIC) allows you to settle your tax debt for less than the full amount owed when paying the full balance would cause financial hardship or when there's doubt about your ability to pay. The IRS Fresh Start program expanded OIC eligibility to help more taxpayers resolve their tax debt.
If approved, you'll pay a reduced lump sum or through a short-term payment plan, and the IRS will forgive the remaining balance.
How Do I Qualify for an Offer in Compromise?
To qualify for an OIC, you must meet these requirements:
- Filed all required tax returns
- Made all required estimated tax payments for the current year
- Not in an open bankruptcy proceeding
- The IRS determines you cannot pay the full amount based on your income, expenses, and assets
- Your offer amount meets or exceeds your "reasonable collection potential"
How to Apply for an Offer in Compromise
Complete IRS Form 433-A (OIC)
Provide detailed information about your income, expenses, assets, and financial situation
Submit Form 656 with Your Offer Amount
Calculate and propose your settlement amount based on your reasonable collection potential
Pay Application Fee and Initial Payment
Include the $205 application fee and 20% of your offer amount (or first payment if paying over time)
Wait for IRS Review
The IRS typically takes 6-24 months to review and approve or deny your offer
Start Your Offer in Compromise Application
Find out if you qualify to settle your IRS tax debt for less than you owe with our automated OIC application
Check Your Eligibility