How Does an Offer in Compromise Work?
An Offer in Compromise lets you settle IRS tax debt for less than you owe — but only if you genuinely cannot pay in full. Here is how the IRS evaluates an offer.
An Offer in Compromise (OIC) is an agreement between a taxpayer and the IRS to settle a tax debt for less than the full amount owed. It is the most powerful relief tool in the Internal Revenue Code — and the most misunderstood. Less than 40% of submitted offers are accepted, and the IRS uses a strict formula called Reasonable Collection Potential (RCP) to decide.
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