Offer in Compromise - American Tax Settlement

Offer In Compromise

The Offer-in-Compromise stands as a potential lifeline in the world of tax resolution, particularly tailored for those in genuine need. On average, individuals who opt for an IRS Offer-in-Compromise find themselves paying a fraction of their actual owed amount, often less than 20%.

Enacted by Congress to assist taxpayers, the IRS Offer in Compromise (OIC) emerges as an optimal remedy to address your tax predicament, offering the potential for substantial savings.

In certain scenarios, your financial circumstances might make it impossible to fulfill your tax obligations nearly, utilizing tax resolution over the long term via an installment plan. In such instances, the IRS might entertain the possibility of an "Offer-in-Compromise," effectively and significantly reducing your tax liability.


Along with the user fee of $205, the IRS requires taxpayers to pay a lump of the OIC offer amount with their application. Further, the IRS will require 20% of the offer amount if the taxpayer wishes to proceed with a lump sum payment method.

How Does an IRS Offer-in-Compromise Work?

  • An offer in compromise is a solution when you and the IRS agree that paying off your full tax debt isn’t possible. This usually happens when your income and assets are limited, and you don’t have enough assets that the IRS could seize. 
  • You propose paying the IRS the most you can afford, even if it’s much less than what you owe in tax debt.
  • If the IRS believes this is the best they can collect from you, they’ll accept the offer. This means they’ll lower your tax debt to match what you can pay.
  • Once you finish paying this agreed-upon amount, your tax debt is considered “paid in full.” This holds true even if the Offer-in-Compromise is only a small part of your original debt.

How Often does IRS Accept Offer In Compromise?

The approval rate for OICs is relatively low, often due to mistakes or missing submission information. To increase your chances of getting approved, seek professional help for this intricate process. Our skilled professional in IRS Offer Compromise will make significant effort to determine if an IRS Offer in Compromise best fits your tax debt situation. Tax debt can be legally settled for the following reasons:

  • Doubt as to liability:

When there’s uncertainty about the accuracy of the assessed tax amount.

  • Doubt as to collectibility:

When it’s questionable whether the taxpayer can ever fully pay the owed tax.

  • Effective Tax Administration:

In cases where the tax is accurate and collectible, exceptional circumstances justify the IRS considering a taxpayer’s OIC.

No matter the reason, qualifying for an IRS Offer in Compromise demands demonstrating that paying the tax would result in economic hardship or would be unjust and inequitable.

Professional Help with IRS Offer in Compromise

If you want the best shot at successfully negotiating an offer in compromise, having an IRS Offer in Compromise expert by your side is crucial. The experts at American Tax Settlement, LLC, including skilled tax accountants and attorneys, are highly experienced in preparing, submitting, and settling these cases. Give one of our Tax Consultants a call, and we’ll happily answer your questions and provide a clearer assessment of your options.

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