Direct answer
What is offer in compromise (oic)?
Historically about 30–40% of submitted Offers in Compromise are accepted. Cases built by experienced tax resolution professionals — with accurate financial disclosures and proper documentation — perform significantly better than self-submitted offers.
If paying your full tax debt would create financial hardship — or if doubt exists about whether you actually owe it — an Offer in Compromise may resolve everything for a fraction of the balance.
Proof
Does offer in compromise (oic) actually work?
Yes — here's what the IRS's own data shows about offer in compromise (oic) outcomes, timelines, and acceptance.
Process
How does the offer in compromise (oic) process work?
In 4 defined steps: pre-qualification (rcp analysis) → form 656 + form 433-a (oic) / 433-b (oic) package → submission, irs review, and counter-offers → acceptance, appeal, or pivot. Most clients see protective action within days, with full resolution measured in weeks to months.
- 01
Pre-qualification (RCP analysis)
We compute your Reasonable Collection Potential — net realizable equity in assets plus 12 or 24 months of disposable income. If RCP exceeds the balance owed, an OIC will not be accepted and we recommend a different path before you pay an application fee.
- 02
Form 656 + Form 433-A (OIC) / 433-B (OIC) package
We document allowable living expenses under the IRS Collection Financial Standards (housing, transportation, food, healthcare), substantiate every line, and structure the offer as lump-sum or periodic to minimize the total.
- 03
Submission, IRS review, and counter-offers
The case is assigned to an IRS Offer Examiner. We answer every information request, defend valuations, and negotiate counter-offers. Collection activity is generally paused while the offer is under review.
- 04
Acceptance, appeal, or pivot
Accepted offers require 5 years of perfect compliance (filing + paying) — we monitor that window. Rejected offers go to the IRS Independent Office of Appeals; if Appeals fails, we pivot to an installment agreement or CNC without losing momentum.
Want to know if offer in compromise (oic) is right for your case?
Free, confidential 15-minute case review with a CPA — no sales pressure, no obligation.
Timeline
How long does offer in compromise (oic) take?
Most cases move through 3 phases. Expect protective relief in the first phase and full resolution typically in 6–12 months.
Investigation & RCP analysis
Pull transcripts, build financials, decide if an OIC is the right tool.
Preparation & submission
Document expenses, build Forms 656 / 433-A (OIC), submit with the $205 fee and 20% down (lump sum).
IRS review to decision
Examiner review, counter-offers, possible Appeals. Collections are generally paused throughout.
Eligibility
Do I qualify for offer in compromise (oic)?
Offer in Compromise (OIC) fits a specific set of taxpayer situations — and there are cases where a different strategy will get you a better outcome. Here's exactly who it's for and who it isn't.
Who this is for
- Taxpayers who genuinely cannot pay the full balance
- People whose income and assets fall below IRS "reasonable collection potential"
- Cases where collection within the statute is unlikely
- Disputed liabilities (doubt as to liability OICs)
When this isn't the right tool
- You can full-pay the balance within the remaining statute through liquid assets or income.
- You have current-year unfiled returns or are not making required estimated payments — the IRS will return the offer unprocessed.
- You are in an open bankruptcy proceeding (file the OIC after discharge).
What we handle for you
- Run a full pre-qualification analysis before you ever submit
- Build Form 656 and Form 433-A (OIC) / 433-B (OIC) correctly
- Document allowable expenses to minimize your offer amount
- Handle every IRS request and appeal until acceptance
Investment
How much does offer in compromise (oic) cost?
We engage on a written flat fee with no hourly billing — typical engagements range from a few thousand to mid-five figures depending on the factors below. Your initial consultation is free and you receive a written quote before any commitment.
The fee for your case depends on:
- • Number of years of returns to be reconstructed or filed before submission.
- • Complexity of your asset picture — self-employment, rentals, equity in retirement accounts.
- • Whether your case requires an Appeals protest or a Doubt-as-to-Liability analysis.
- • Lump-sum vs. periodic payment structure (affects required filings).
Your initial consultation is free. You'll get a written scope and flat-fee quote before any engagement.
Watch out
What mistakes should I avoid with offer in compromise (oic)?
These are the four most common errors we see when taxpayers (or under-qualified preparers) handle these cases — each one can cost months of delay or trigger an outright rejection.
Submitting before pulling transcripts
Half of OIC rejections come from undisclosed liabilities or missed returns. We pull a full IRS account transcript first — every time.
Overstating expenses outside IRS standards
Examiners reject expenses that exceed the Collection Financial Standards without substantiation. Documentation wins; assertions don't.
Ignoring dissipated assets
If you transferred assets in the last 3 years, the IRS adds them back to your RCP. We address this proactively in the offer narrative.
Defaulting the 5-year compliance period
An accepted OIC reverts and the original balance is reinstated if you miss a filing or payment in the next 5 years. We build a compliance calendar at acceptance.
Compare
What are the alternatives to offer in compromise (oic)?
Offer in Compromise (OIC) isn't the only path. Here are the other IRS programs that may fit better depending on your finances, asset picture, and timeline.
Partial Pay Installment Agreement (PPIA)
Your RCP is too high for an OIC but you can't full-pay within the statute — pay reduced monthly amounts until the CSED runs.
Currently Not Collectible (CNC)
Income covers only basic living expenses today, but is expected to recover. Pauses collections without committing to a settlement.
Bankruptcy (Chapter 7 or 13)
Older income-tax debt that meets the 3-year, 2-year, 240-day rules may be dischargeable — coordinated with bankruptcy counsel.
Not sure which path fits your situation? We'll tell you straight.
Free, confidential 15-minute case review with a CPA — no sales pressure, no obligation.
More questions answered
Common questions about offer in compromise (oic)
Direct answers to the 7 questions we hear most often from taxpayers researching offer in compromise (oic).
What's the IRS acceptance rate for OICs?+
Historically about 30–40% of submitted Offers in Compromise are accepted. Cases built by experienced tax resolution professionals — with accurate financial disclosures and proper documentation — perform significantly better than self-submitted offers.
How long does an OIC take?+
Most OICs take 6–12 months from submission to final IRS decision. During that time, IRS collection actions are generally paused.
What if my OIC is rejected?+
We can appeal the rejection or pivot to another resolution — installment agreement, currently not collectible status, or a revised offer.
How much does an Offer in Compromise cost out of pocket?+
The IRS application fee is $205 (waived if you meet the low-income certification). Lump-sum offers require 20% down with the application. Professional fees vary by case complexity — we quote a flat fee after the free consultation.
Will an OIC remove a federal tax lien?+
Filing the offer does not remove the lien. Once the offer is paid in full and the 5-year compliance window starts, the lien is released. We can request a lien withdrawal under qualifying conditions.
Can I submit an OIC while in an installment agreement?+
Yes. The installment agreement is suspended during OIC review. If the OIC is rejected, the installment agreement resumes.
Does an OIC affect my credit score?+
The OIC itself is not reported to credit bureaus. The underlying federal tax lien (if filed) does appear on title and asset searches.
Why Comprehensive Tax Resolution
Why should I hire Comprehensive Tax Resolution for offer in compromise (oic)?
Your case is reviewed and led by Franklin Sofi, MBA, CPA, CTRS — backed by a flat-fee engagement, same-day Power of Attorney filing, and 16+ years of direct IRS representation.
- Founder Franklin Sofi, MBA, CPA — Certified Tax Resolution Specialist with 16+ years representing taxpayers before the IRS and ASTPS Gold Member.
- You never speak to the IRS. Power of Attorney (Form 2848) is filed the same day so every call, letter, and Revenue Officer is routed to our office.
- Flat-fee engagements with a written scope. No hourly surprises, no monthly retainers stretching out a case that should close.
References
Sources & further reading
Authoritative primary sources cited or referenced on this page.