Offers in Compromise (OIC)
When tax debt becomes unmanageable, the IRS offers several legal avenues that can help taxpayers regain control of their finances. Whether you’re seeking a settlement for less than you owe, a manageable payment plan, or temporary relief due to financial hardship, our firm guides you through every step with experience and precision.
We handle all communication with the IRS, prepare the required documentation, and work to secure the most favorable resolution available under federal law.
Offer in Compromise
An Offer in Compromise allows qualified taxpayers to settle their federal tax debt for less than the full amount owed. It is one of the most powerful tools for taxpayers who simply cannot afford to pay their balance in full.
The IRS will typically consider an OIC only when the taxpayer’s financial information proves that full payment is not realistically possible.
How the IRS Evaluates an OIC
The IRS examines your Reasonable Collection Potential (RCP)—a calculation based on:
- The value of your assets
- Your current and future income
- Your monthly living expenses (based on IRS national standards)
Your offer must generally meet or exceed your RCP to be accepted.
Grounds for Acceptance
The IRS may approve an OIC under one of three categories:
- Doubt as to Liability
Used when there is genuine uncertainty about whether you actually owe the amount assessed. - Doubt as to Collectibility
Appropriate when it’s unlikely you could ever pay the full amount before the collection statute expires. - Effective Tax Administration
Granted when paying the full amount would create severe financial hardship or would be unfair or inequitable based on exceptional circumstances.
Why Legal Representation Matters
OIC acceptance rates are low. A carefully prepared, well-documented submission significantly improves your chances.
We evaluate your financial profile, determine eligibility, prepare the required IRS forms and supporting documents, and negotiate with the IRS on your behalf.
IRS Payment Plans & Instalment Agreements
When full payment isn’t possible up front, the IRS allows taxpayers to pay their balance over time. We help you navigate the rules, gather documentation, and secure a payment arrangement that fits your financial reality—not just the IRS’s assumptions.
When reviewing your ability to pay, the IRS uses strict standards for allowable expenses. These may not align with real household budgets, so having an attorney advocate for accurate financial representation is essential.
Below are the primary IRS instalment options:
Streamlined Instalment Agreement
Best for taxpayers who:
- Owe below $25,000, and
- Can pay the balance within 60 months (5 years)
This program requires minimal documentation and is quicker to process.
Non-Streamlined Instalment Agreement
Designed for taxpayers who:
- Owe more than $25,000, or
- Cannot pay off the balance within 5 years
These arrangements require a full financial disclosure, including:
- Bank statements
- Pay stubs
- Expense documentation
- Household bills
Approval often involves additional IRS scrutiny and may require negotiations to ensure the monthly payment is realistic.
Large Dollar Instalment Agreements
Taxpayers who owe over $100,000 fall into a special category reviewed by a dedicated IRS unit.
These cases face the highest level of documentation requirements and oversight.
Professional representation is critical in large-dollar cases to ensure accuracy, compliance, and strategic negotiation.
Partial Payment Installment Agreement (PPIA)
A Partial Payment Installment Agreement may be an option for taxpayers who cannot afford to pay their full debt within the collection period.
Unlike standard plans, a PPIA allows:
- Lower monthly payments
- Possible expiration of part of the tax debt before full repayment
Because eligibility must be re-evaluated every two years, these cases require careful management and ongoing strategy.
Currently Not Collectible (CNC) Status
If your financial situation prevents you from making any payments at all, the IRS may classify your account as Currently Not Collectible.
Benefits of CNC:
- Collection efforts stop
- Wage garnishment and bank levies are halted
- You are not required to make payments while in hardship status
Interest and penalties continue to accrue, but CNC status provides much-needed breathing room until your financial circumstances improve.
An attorney can help determine if this status is appropriate and prepare the documentation needed to demonstrate hardship.
How We Help
We take a hands-on, comprehensive approach to resolving tax debt. Our services include:
- Evaluating eligibility for OIC, CNC, and installment agreements
- Preparing IRS forms and financial statements
- Negotiating directly with revenue officers
- Protecting your income and assets from aggressive collection actions
- Ensuring compliance with IRS standards to avoid delays or denials
Your financial situation is unique, and so is our strategy for resolving your tax debt.
If you owe back taxes or have received notices from the IRS, don’t navigate these options alone.
Contact our firm to schedule a consultation and learn which tax relief strategy is right for your situation.
