{"id":353982,"date":"2022-08-19T07:44:43","date_gmt":"2022-08-19T12:44:43","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/tax\/federal-taxes\/what-is-an-offer-in-compromise.html"},"modified":"2024-01-21T01:22:55","modified_gmt":"2024-01-21T06:22:55","slug":"what-is-an-offer-in-compromise","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/tax\/federal-taxes\/what-is-an-offer-in-compromise.html","title":{"rendered":"What Is an Offer in Compromise?"},"content":{"rendered":"\n
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What Is an Offer in Compromise?<\/h1>\n\n
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\n By J.P. Finet, J.D.<\/a> | Legally reviewed by J.P. Finet, J.D.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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If you cannot pay your full income tax bill, you may try to negotiate a lower payment by making an offer in compromise (OIC). If the Internal Revenue Service accepts your OIC, you may be able to make a reduced payment that eliminates your tax bill and stops IRS collection activities.<\/p>\n\n <\/div>\n\n\n\n

While a steady stream of radio and TV advertising may make it seem like getting tax relief is a simple solution for anyone unable to pay the total amount of their tax bill, the reality is often quite different. The IRS has strict requirements for OICs, and the taxpayer must generally show that the offer represents the agency’s best shot at getting paid within a reasonable amount of time. In most years, the IRS only accepts about 40% of OICs.<\/p>\n

The low acceptance rate for OIC is because the IRS often finds that the taxpayer has the resources to pay their full tax bill under a payment plan or owns assets they can sell to cover their tax bill. If you truly have no financial resources, contact the IRS and ask to be placed on\u00a0currently not collectible<\/a>\u00a0status. The agency will stop trying to collect your tax bill until your financial situation improves.<\/p>\n

If you believe you are a good candidate for an OIC but are concerned the IRS will not consider your offer, you can use the agency’s\u00a0Offer in Compromise Pre-Qualifier Tool<\/a>\u00a0to see if you may be eligible.<\/p>\n

When Are OICs Accepted<\/h2>\n

The IRS generally accepts OICs in three situations. These generally involve:<\/p>\n