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SETTLING TAX DEBT WITH AN IRS OFFER IN COMPROMISE An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles a taxpayer's tax liabilities for less than the full amount owed. That's the good news. The bad news is that not everyone is eligible to use this option to settle tax debt. In fact, nearly 60 percent of taxpayer requested offers in compromise were rejected by the IRS. If you owe money to the IRS and are wondering if an IRS offer in compromise is the answer, here's what you need to know. WHO IS ELIGIBLE? If you can't pay your full tax liability or doing so creates a financial hardship, an offer in compromise may be a legitimate option. However, it is not for everyone, and taxpayers should explore all other payment options before submitting an offer in compromise to the IRS. Taxpayers who can fully pay the liabilities through an installment agreement or other means, generally won't qualify for an OIC. To qualify for an OIC, the taxpayer must have: Filed all tax returns. Made all required estimated tax payments for the current year. Made all required federal tax deposits for the current quarter if the taxpayer is a business owner with employees. QUESTIONS? If you have any questions about the IRS Offer in Compromise program, don't hesitate to contact the office for more information.