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IRS Offer In Compromise – How to Qualify

An Offer in Compromise (OIC) allows some taxpayers to settle their tax debt for less than the full amount owed. While you’ve probably seen advertisements suggesting that “everyone qualifies,” the reality is that the IRS approves Offers in Compromise only when specific eligibility requirements are met.

The IRS looks at your overall financial situation, including:

  • Your income and earning potential
  • Your monthly living expenses
  • The value of your assets, such as your home, vehicles, retirement accounts, and investments
  • Your ability to pay the tax debt over time

In general, the IRS will consider an Offer in Compromise when it determines that it is unlikely to collect the full amount you owe within the time allowed by law. The IRS also requires that all required tax returns have been filed and that you are current with your estimated tax payments or withholding, if applicable.

Not everyone qualifies for an Offer in Compromise, and in many cases another solution—such as an installment agreement, Currently Not Collectible status, or penalty relief—may be a better option.

Before recommending any course of action, I’ll carefully evaluate your financial situation and explain all the available options. If an Offer in Compromise appears to be the right solution, I’ll help prepare a complete and accurate application designed to give you the strongest possible case for IRS consideration.  With my prior IRS managerial experience as the approving official for Offer in Compromise cases in my jurisdiction, I have an keen understanding of what is generally required for qualification.

My approach is straightforward: I’ll tell you honestly whether I believe you have a reasonable chance of qualifying. If an Offer in Compromise isn’t the best solution, I’ll recommend an alternative that better fits your circumstances. My goal is to help you resolve your tax problem—not to sell you a program that isn’t right for you.