The Offer in Compromise (OIC) is an excellent program for potentially eliminating tens of thousands of dollars in tax debt, but first, your offer must be accepted by the IRS. Taxpayers may have seen advertisements promising that their tax debt can be settled for pennies on the dollar with an OIC, but not everyone is eligible for an OIC, and those that are eligible must follow the program’s guidelines carefully. For some taxpayers, an OIC will only be accepted after negotiations and possibly appealing an OIC rejection.
Determining Your Collection Potential
The IRS accepts an OIC when it determines that the offer is the most that they can reasonably expect to collect from you based on your financial information. If you receive a rejection letter from an offer specialist, it will often be because the IRS believes that your offer does not represent the most that they can get from you.