FOR TAXPAYERS WHO OWE MORE THAN THEY CAN PAY

Offer in Compromise Lawyers Who Settle IRS Debt for Less Than You Owe

We calculate your exact offer amount first. Then we tell you whether to file – no false promises, no pennies-on-the-dollar guarantees.

Check Your Eligibility Now

Your information is 100% confidential and protected.

What Clients Say After Settling Their IRS Debt

When You Owe More Than You Can Pay, the IRS Has a Settlement Program

The IRS built the Offer in Compromise program for one purpose: to collect something from taxpayers who cannot pay the full amount, rather than nothing from taxpayers who walk away or file bankruptcy.

That means the IRS is motivated to accept reasonable offers. They are not your enemy in this process – they want to close your case. What they won’t accept is an offer that ignores what their formula says they can collect from you.

An offer in compromise lawyer calculates that number correctly before you file anything. Submitting the wrong amount – even slightly – is the most common reason the IRS rejects applications. Our attorneys know the exact formula, know which expenses the IRS will allow, and know how to present your financial picture to produce the lowest acceptable offer.

Why trust us with your Offer in Compromise?

Do You Qualify? The IRS Uses a Formula, Not a Judgment Call

Qualifying for an Offer in Compromise comes down to one calculation: your Reasonable Collection Potential (RCP). If the RCP the IRS calculates from your income, expenses, and assets is less than what you owe, you may qualify to settle for that amount.

The Five Requirements Before the IRS Will Review Your Application

• All required federal tax returns filed – every year, no gaps

• Current on estimated tax payments for this year (if self-employed)

• Current on federal tax deposits (if you have employees)

• No open bankruptcy proceeding

• At least one assessed federal tax debt

If you have unfiled returns, we handle those first. The IRS rejects OIC applications without reviewing them if any return is missing. Most clients who call us thinking they don’t qualify turn out to be eligible once we file their missing returns and run the RCP calculation.

What the IRS Actually Looks at When They Calculate Your Offer Amount

Your minimum acceptable offer equals the net equity in your assets plus a multiplier of your monthly disposable income. That disposable income figure is your gross income minus what the IRS allows for living expenses – not what you actually spend, but what their Collection Financial Standards say you’re allowed.

This is where most self-prepared applications go wrong. People use fair market value for their assets instead of quick-sale value (80% of FMV). They miss allowable expenses. They use the wrong income multiplier. Each mistake raises your calculated offer – and a higher offer is harder to get accepted.

Our offer in compromise attorneys run this calculation correctly the first time. We tell you what number the IRS will accept, and we only file when that number makes sense for your situation.

Our Offer in Compromise Process

Step 1: Free Case Evaluation

We review your IRS tax transcripts and look at your income, expenses, and assets. Then we calculate your Reasonable Collection Potential, which is what the IRS thinks they can collect from you. We tell you whether an Offer in Compromise makes sense and what settlement to expect. If OIC is not right for you, we recommend other options.

Step 2: Document Collection and Form Preparation

We gather pay stubs, bank statements, asset records, and proof of expenses. Then we complete Form 656 and Form 433-A (OIC) for individuals or Form 433-B (OIC) for businesses. We calculate your offer amount and prepare all supporting materials.

Step 3: Submit Application to IRS

We submit your completed OIC package to the IRS with the $205 application fee and your initial payment. For lump sum offers, this is 20% of your offer amount. For periodic offers, this is your first monthly payment. Low-income applicants may qualify for fee waivers.

Step 4: IRS Review Period

The Offer Examiner reviews your documents and may ask for more information. We handle all IRS communication for you. During review, collection activity stops and the IRS cannot take money from your wages or bank accounts. However, they may file a Notice of Federal Tax Lien to protect their interest.*

Step 5: Decision and Resolution

The IRS will accept, reject, or return your offer. If accepted, you pay the remaining balance within 5 months for lump sum offers or continue monthly payments for 24 months for periodic offers. If rejected, you have 30 days to appeal using Form 13711. Many rejected offers get approved at the IRS Independent Office of Appeals.

Typical Timelines:

Lump sum offers: 3-12 months
Periodic payment offers: 4-18 months
Complex cases: Up to 24 months

*Important: If the IRS doesn’t make a decision within 24 months, your offer is automatically accepted by law.

Ready to Settle Your IRS Debt?

Schedule your no-obligation tax debt consultation today. Call (855) 900-1040 or fill out the form here and we’ll review your case to outline next steps.

Schedule a Free Consultation Now

Your information is 100% confidential and protected.

Offer in Compromise Success Rates (DIY vs. Professional Representation)

According to the IRS Data Book, roughly 40% of Offer in Compromise applications get accepted nationally. That number changes yearly between 21% and 42%. Most rejections happen because taxpayers submit incomplete documents or don’t follow IRS Collection Financial Standards.

Silver Tax Group has secured approval on over 128 Offers in Compromise, reducing client tax debt by more than $15 million. Our attorneys know how the IRS calculates acceptable offers and how to present your finances to meet their standards.

Who Qualifies For An Offer In Compromise?

The IRS requires all of the following before they’ll review your Offer in Compromise:

What Automatically Disqualifies You:

Open bankruptcy is the most common reason you won’t qualify. If you have an ongoing audit, you cannot include those tax years in your offer until the audit finishes. Submitting an offer that is clearly too low given your finances can result in penalties.

The Real Qualification Test:

Meeting basic requirements is step one. The IRS then calculates your Reasonable Collection Potential to determine if you actually qualify. If your RCP shows you can pay the full amount before the 10-year collection statute expires, the IRS will reject your offer. Our OIC attorneys evaluate your situation before filing and recommend alternatives if an Offer in Compromise is not right for you.

Three Types of Offers the IRS Accepts

The IRS accepts Offers in Compromise based on three different grounds. Most applicants qualify under the first type, but understanding all three helps determine which applies to your situation.

1. Doubt as to Collectibility (DATC)

Doubt as to Collectibility is the most common type of Offer in Compromise. You use this option when you agree you owe the debt but cannot pay the full amount. The IRS calculates your Reasonable Collection Potential (RCP), and if it’s less than your total tax debt, you may qualify to settle for that amount.

Most taxpayers who qualify for Offer in Compromise use Doubt as to Collectibility. It requires Form 656 and Form 433-A (OIC) for individuals or Form 433-B (OIC) for businesses.

2. Doubt as to Liability (DATL)

You file based on Doubt as to Liability when you believe the tax debt itself is incorrect. This could be because the IRS assessed tax you don’t actually owe, made a calculation error, or you have evidence disputing the amount.

This type requires Form 656-L instead of the standard Form 656. You can submit an offer as low as $1 if you have strong evidence you don’t owe the debt.

Doubt as to Liability is less common but can be powerful when you have documentation supporting your position.

3. Effective Tax Administration (ETA)

You file based on Effective Tax Administration when you technically could pay the full amount, but doing so would create exceptional hardship or would be unfair due to special circumstances.

This is the least common OIC type. The IRS grants it only in exceptional circumstances with strong documentation.

The IRS requires compelling documentation showing that collection would be inequitable or would cause undue economic hardship that outweighs the government’s interest in collecting the full amount.

OIC Payment Options: Lump Sum vs. Periodic

When you file an Offer in Compromise, you choose between two payment options. Each has advantages depending on your financial situation.

Lump Sum Cash Offer

With a lump sum offer, you pay 20% of your offer amount with your application. If the IRS accepts, you pay the remaining 80% within 5 months.

The IRS uses a 12-month multiplier for your income when calculating your Reasonable Collection Potential. This typically results in a lower total settlement compared to periodic payment offers.

Periodic Payment Offer

With a periodic payment offer, you make monthly payments while the IRS reviews your application. If accepted, you continue monthly payments for 24 months total.

The IRS uses a 24-month multiplier for your income when calculating RCP. This results in a higher total settlement amount, but spreads payments over time.

Which Tax Debt Repayment Structure Should You Choose?

If you can afford the lump sum option, it is almost always the better financial choice. The 12-month multiplier results in a lower total payment.

Periodic payment offers provide flexibility when lump sum is not possible. Some clients start with periodic payments while arranging funds, then convert to lump sum before acceptance. Our OIC attorneys help you choose the right option based on your finances and settlement goals.

How the IRS Calculates Your Reasonable Collection Potential

The IRS uses a formula called Reasonable Collection Potential (RCP) to determine the minimum amount they’ll accept for your Offer in Compromise. Understanding this formula is why professional representation often results in significantly lower settlement amounts.

The RCP Formula:

RCP = Net Asset Value + (Monthly Disposable Income × 12 or 24)

The multiplier is 12 months for lump sum offers or 24 months for periodic payment offers. This is why lump sum offers typically result in lower total settlement amounts.

How the IRS Calculates Net Asset Value:

The IRS calculates your net asset value using “quick sale value”—typically 80% of fair market value—minus any loans or liens against the asset. Assets the IRS considers include:

Bank account balances
Investment and retirement accounts
Real estate equity (home value minus mortgage)
Vehicle equity (value minus loan balance)
Business assets and equipment
Cash value of life insurance policies
Other personal property of value

How the IRS Calculates Monthly Disposable Income:

Monthly disposable income equals your gross monthly income minus allowable living expenses. The IRS uses their Collection Financial Standards to determine allowable amounts. Income sources include wages, self-employment income, rental income, investment income, retirement distributions, and any other regular income. Allowable expenses under IRS standards include:

Housing and utilities (capped by county)
Transportation (ownership and operating costs)
Food, clothing, and personal care
Out-of-pocket health care costs
Health insurance premiums
Court-ordered payments (child support, alimony)
Current tax payments
Secured debt payments

Why Professional Representation Lowers Your RCP:

DIY applicants often understate allowable expenses and overvalue assets using fair market value instead of quick sale value. Our tax attorneys calculate RCP correctly using IRS Collection Financial Standards, which typically results in a lower settlement amount.

Offer in Compromise IRS Forms

Form Name	Purpose	Description
Form 656 Download Form 656 from the IRS	Offer in Compromise	Main application form for Doubt as to Collectibility and Effective Tax Administration offers
Form 656-L Download Form 656-L from the IRS	Offer in Compromise (Doubt as to Liability)	Application form when you dispute the amount of tax the IRS claims you owe
Form 433-A (OIC) Download Form 433-A (OIC) from the IRS	Collection Information Statement for Wage Earners and Self-Employed	Detailed financial disclosure for individual taxpayers
Form 433-B (OIC) Download Form 433-B (OIC) from the IRS	Collection Information Statement for Businesses	Detailed financial disclosure for business tax debts
Form 656-B Download Form 656-B from the IRS	Offer in Compromise Booklet	Instructions, worksheets, and checklists for completing your OIC
Form 13711 Download Form 13711 from the IRS	Request for Appeal of Offer in Compromise	Used to appeal a rejected OIC within 30 days of rejection

Form 656

Download Form 656 (PDF)

Purpose

Offer in Compromise

Description

Main application form for Doubt as to Collectibility and Effective Tax Administration offers

Form 656-L

Download Form 656-L (PDF)

Purpose

Offer in Compromise (Doubt as to Liability)

Description

Application form when you dispute the amount of tax the IRS claims you owe

Form 433-A (OIC)

Download Form 433-A (OIC) (PDF)

Purpose

Collection Information Statement for Wage Earners and Self-Employed

Description

Detailed financial disclosure for individual taxpayers

Form 433-B (OIC)

Download Form 433-B (OIC) (PDF)

Purpose

Collection Information Statement for Businesses

Description

Detailed financial disclosure for business tax debts

Form 656-B

Download Form 656-B (PDF)

Purpose

Offer in Compromise Booklet

Description

Instructions, worksheets, and checklists for completing your OIC

Form 13711

Download Form 13711 (PDF)

Purpose

Request for Appeal of Offer in Compromise

Description

Used to appeal a rejected OIC within 30 days of rejection

Application Fee: $205 (non-refundable)

This fee is required with all OIC submissions. The IRS will not process your offer without it.

Low-Income Certification:

If your income is at or below 250% of the federal poverty level, you may qualify for Low-Income Certification. This waives the $205 application fee and reduces initial payment requirements.

For 2024, the poverty level threshold for a single person is approximately $36,450 annually. For a family of four, it’s approximately $75,000.

Initial Payment:

Lump sum offers: 20% of your offer amount, submitted with your application
Periodic payment offers: First monthly payment amount, submitted with your application

Initial payments are applied to your tax debt and are not refundable if your offer is rejected.

Frequently Asked Questions About Offer in Compromise

What is an Offer in Compromise?

An Offer in Compromise (OIC) is an IRS settlement program that eliminates tax debt for less than the full amount owed. The IRS reviews your finances, accepts a lump sum or periodic payment, and permanently wipes out the remaining balance.

Tax Lien Release – The IRS removes any federal tax lien from your property
Collection Stops – All wage garnishments, bank levies, and collection calls end
Debt Elimination – The unpaid balance is legally forgiven

Once the IRS accepts your OIC and you pay the agreed amount, that tax debt is resolved permanently. If you’re facing an IRS balance you can’t pay in full, schedule a free case review to see if you qualify.

Do I qualify for an Offer in Compromise?

You may qualify for an OIC if you meet four IRS eligibility requirements and your Reasonable Collection Potential (RCP) falls below your total tax debt.

Filing Compliance – All required tax returns filed for the past six years
Payment Compliance – Current on estimated tax payments if self-employed
No Open Bankruptcy – Your case cannot involve an active bankruptcy proceeding
Existing Tax Debt – You owe at least one assessed federal tax liability

Meeting these requirements gets your application reviewed. The IRS then calculates your RCP using your income, monthly expenses, and asset equity. If your RCP is lower than what you owe, you may qualify. A professional evaluation before applying shows exactly where you stand and whether OIC makes sense for your situation.

How much will the IRS accept for an Offer in Compromise?

The IRS calculates your minimum acceptable offer using the Reasonable Collection Potential (RCP) formula. Net Asset Value plus Monthly Disposable Income multiplied by 12 or 24 months equals your RCP.

Net Asset Value – Equity in property, vehicles, bank accounts, and investments
Monthly Disposable Income – Income minus IRS-allowed living expenses
Payment Timeline – 12-month multiplier for lump sum offers, 24 months for periodic payments

Most accepted OICs settle between 10% and 30% of total tax debt. Your specific settlement depends entirely on your financial picture. Tax attorneys often reduce your RCP by maximizing allowable expenses under IRS Collection Financial Standards, which lowers your required offer amount.

What is the Offer in Compromise acceptance rate?

The IRS accepts approximately 40% of OIC applications based on IRS Data Book statistics. Acceptance rates fluctuate between 21% and 42% depending on the year.

Incomplete Applications – Missing forms, signatures, or required documentation
Incorrect RCP Calculations – Math errors or failure to use IRS Collection Financial Standards
Low Offers – Amounts below what the IRS determines it can collect

Most rejections happen because applicants make preventable mistakes. Tax attorneys who handle OIC cases regularly achieve higher acceptance rates because they understand IRS requirements, calculate RCP correctly, and prepare applications that meet IRS standards from the start.

How long does an Offer in Compromise take?

Most OIC cases take 6 to 24 months from submission to final IRS decision. Timeline depends on your payment option and case complexity.

Lump Sum Offers – 6 to 12 months
Periodic Payment Offers – 9 to 18 months
Complex Cases – Up to 24 months

During this time, IRS collection activity stops. The IRS cannot levy your wages or bank accounts while your offer is pending. If the IRS doesn’t issue a decision within 24 months of submission, your offer is automatically accepted by law under IRC Section 7122.

What happens if my Offer in Compromise is rejected?

You have 30 days from rejection to file an appeal using IRS Form 13711. Appeals go to the IRS Independent Office of Appeals, where many initially rejected offers get approved.

Form 13711 – Request for Appeal of Offer in Compromise
Installment Agreement – Monthly payments over 72 months on the full balance
Currently Not Collectible Status – Pauses collection when you cannot afford payments
Penalty Abatement – Reduces total debt by removing IRS penalties

If appeal isn’t the right path, these alternatives exist. Each option has different qualification requirements and long-term consequences. A rejected OIC doesn’t close every door. Our tax attorneys review your rejection letter and identify which option gives you the best outcome.

What is the difference between an OIC and an installment agreement?

An Offer in Compromise settles your tax debt for less than you owe. An Installment Agreement pays the full balance over time with interest.

Offer in Compromise – You pay a portion of your debt (typically 10-30%) as a lump sum or over 24 months, and the IRS eliminates the remaining balance
Installment Agreement – You pay the full balance plus interest over up to 72 months with no debt forgiveness

OIC saves more money if you qualify, but the IRS requires documented financial hardship. Installment Agreements are easier to obtain but cost more over time due to accruing interest and penalties. Many taxpayers who assume they only qualify for an Installment Agreement actually qualify for OIC.

How much does an Offer in Compromise cost?

The IRS charges a $205 non-refundable application fee. You also submit an initial payment with your OIC application.

Lump Sum Offers – 20% of your total offer amount with submission
Periodic Payment Offers – First proposed monthly payment with submission
Low-Income Certification – Waives the $205 fee and initial payment if your income is at or below 250% of federal poverty guidelines

Our firm uses flat-fee pricing for OIC preparation, so you know the total cost before we start work on your case. Schedule a free case review to get your fee quote and eligibility assessment.

Find Out If You Qualify to Settle Your Tax Debt

The longer you wait, the more penalties and interest add to what you owe. The IRS doesn’t stop collection activity on its own. Wage garnishment, bank levies, and tax liens only get worse with time.

We offer a free case evaluation to review your finances, calculate your estimated offer amount, and tell you honestly whether Offer in Compromise is right for your situation. No obligation, no pressure, no cost to find out where you stand.

FOR TAXPAYERS WHO OWE MORE THAN THEY CAN PAY

Offer in Compromise Lawyers Who Settle IRS Debt for Less Than You Owe

What Clients Say After Settling Their IRS Debt

When You Owe More Than You Can Pay, the IRS Has a Settlement Program

Why trust us with your Offer in Compromise?

Do You Qualify? The IRS Uses a Formula, Not a Judgment Call

The Five Requirements Before the IRS Will Review Your Application

What the IRS Actually Looks at When They Calculate Your Offer Amount

Our Offer in Compromise Process

Ready to Settle Your IRS Debt?

Offer in Compromise Success Rates (DIY vs. Professional Representation)

Who Qualifies For An Offer In Compromise?

What Automatically Disqualifies You:

The Real Qualification Test:

Three Types of Offers the IRS Accepts

1. Doubt as to Collectibility (DATC)

2. Doubt as to Liability (DATL)

3. Effective Tax Administration (ETA)

OIC Payment Options: Lump Sum vs. Periodic

Lump Sum Cash Offer

Periodic Payment Offer

Which Tax Debt Repayment Structure Should You Choose?

How the IRS Calculates Your Reasonable Collection Potential

The RCP Formula:

How the IRS Calculates Net Asset Value:

How the IRS Calculates Monthly Disposable Income:

Why Professional Representation Lowers Your RCP: