Скачать или смотреть How Does an IRS Offer in Compromise Work? (CPA Explains)

If you owe the IRS tens of thousands of dollars, an Offer in Compromise may allow you to legally settle that debt for far less — but most taxpayers are denied. In this video, I’ll explain exactly how an IRS Offer in Compromise works, who actually qualifies, and the mistakes that get applications rejected.
I’m a CPA and practice exclusively in IRS tax representation, and as well have written a book for Thomson Reuters. I’m an expert-level writers, researcher and negotiator. I handle clients throughout the United States in reference to IRS representation.
This video explains how an IRS Offer in Compromise works, who qualifies, and how taxpayers can settle IRS tax debt for less than the full amount owed. If you owe back taxes and cannot afford to pay the IRS in full, an Offer in Compromise (OIC) may allow you to legally resolve your tax debt for a reduced amount.
An IRS Offer in Compromise is a formal tax settlement program that allows eligible taxpayers to resolve unpaid federal tax liabilities based on their ability to pay, income, expenses, and asset equity. In this video, we break down the OIC process in plain English.
✅ In this video, you’ll learn:
• What an IRS Offer in Compromise is
• Who qualifies for an Offer in Compromise
• The major benefits of an OIC over other options
The IRS does not accept offers simply because a taxpayer owes money. Acceptance depends on strict financial analysis using IRS Form 433-A (OIC) and Form 656. Understanding these rules before filing can significantly improve your chances of success.
This video is especially helpful if you are:
• Facing IRS collections or liens
• Considering tax debt settlement
• Representing yourself (pro se) before the IRS
• Comparing an Offer in Compromise vs. an installment agreement
📌 Important: An Offer in Compromise is not right for everyone. Filing incorrectly can delay
your case or result in rejection.

FAQ – IRS Offer in Compromise
What is an IRS Offer in Compromise?
An IRS Offer in Compromise is a program that may allow qualifying taxpayers to settle federal tax debt for less than the full amount owed when full payment is not realistic.

Who qualifies for an Offer in Compromise?
Eligibility depends on income, expenses, assets, and overall ability to pay. The IRS reviews each case to determine whether the offered amount reflects what it can reasonably collect.

How long does the Offer in Compromise process take?
In many cases, the IRS review process takes six months or longer, depending on how complex the financial situation is and how complete the application is.

How much does an Offer in Compromise cost?
The IRS generally requires an application fee and an initial payment unless the taxpayer qualifies for a low-income exception. Additional costs may apply if professional assistance is used.

What happens if the IRS rejects an Offer in Compromise?
If an offer is rejected, the taxpayer may have the right to appeal the decision or explore other tax resolution options, such as an installment agreement.

OIC Payment Options (IRS Rules)
1️⃣ Lump-Sum Cash Offer (Most Common)
• Payment period:
👉 Within 5 months of IRS acceptance
• Structure:
o 20% down with the offer
o Remaining 80% paid in up to 5 monthly installments

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2️⃣ Periodic Payment Offer
• Payment period:
👉 Up to 24 months after acceptance
• Structure:
o First payment submitted with the offer
o Continue monthly payments while the IRS reviews the OIC
o Payments continue after acceptance until paid in full
📌 This option spreads payments out but has tradeoffs (see below).
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🔹 Lump-sum offers are usually cheaper
• IRS uses 12 months of future income for lump-sum
• IRS uses 24 months of future income for periodic
• That alone can double the income component of your offer
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🔹 Payments during review are non-refundable
• If the offer is rejected:
o Payments are applied to your tax debt
o You don’t get them back
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🔹 You must stay current
While the OIC is pending and after acceptance:
• All tax filings must be timely
• All new taxes must be paid
Failure = default of the OIC
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✅ Bottom Line
• No, you do not have to pay an OIC within five months
• Yes, you can pay over up to 24 months if you choose a periodic payment offer
• However, the lump-sum option is usually financially better if you can swing it