IRS tax relief
Offer in Compromise
An Offer in Compromise is the real thing behind every "settle for pennies on the dollar" advert. It genuinely works, for the people who qualify. The formula decides, not the salesmanship.
You are probably here because
- You owe more than you could realistically ever pay
- Your income barely covers necessary living expenses
- You have little equity in a home, vehicles or savings
- You have been called by a firm promising a settlement over the phone
What this actually means
The IRS decides an offer on Reasonable Collection Potential: the equity in what you own plus what is left of your income after allowable living expenses, projected forward. If that number is less than the balance, an offer becomes possible.
It is arithmetic, not persuasion. Anyone who quotes you a settlement figure before seeing your finances and your transcripts is guessing, and they are the reason this remedy has a reputation problem.
Not qualifying is not the end. A payment plan, penalty abatement or Currently Not Collectible status is the right answer far more often than an offer is, and none of those require you to hand over your equity.
What can be done
Run the numbers honestly first
We calculate your collection potential before you spend anything on an offer. If it will not fly, we say so and build the plan that will.
Doubt as to collectibility
The common route: you cannot pay the full balance within the time the IRS has left to collect.
Effective tax administration
A narrower path where you could technically pay, but collecting in full would be inequitable given your circumstances, often for health or age reasons.
Doubt as to liability
Where the assessment itself is wrong. This is a different argument, and often a stronger one than a settlement.
How fast
Offers are a long process, commonly six to twelve months from submission to a decision, sometimes more. Collection generally pauses while it is pending, which is part of the value, but this is not a quick fix.
Common questions
What are my real chances?+
The IRS accepts a minority of the offers submitted, and many of the rejections were never viable to begin with. A properly screened case is a completely different proposition from a mass-marketed one.
Why do the ads promise so much?+
Because a percentage-of-savings pitch sells. A firm that files offers for everyone gets paid up front whether or not the offer had a chance. Ask anyone who quotes you a number how they arrived at it.
What happens if it is rejected?+
You can appeal, and the financial work is not wasted. The same package supports a payment plan or hardship status. Nothing is lost but time.
Every case turns on its own facts, and outcomes depend on your finances and the discretion of the taxing authority. Nothing here is a promise of a particular result.
Let’s talk
Ready to work with a CPA who actually explains it?
Start with a free 30-minute intro call. Bring your questions, your notices, or just a rough idea of what you need. You will leave the call knowing exactly what the next step is and what it costs.