IRS Offer in Compromise Guide for Tax Debt Settlement (2026)
Apply for IRS offer in compromise: eligibility criteria, calculation formula, application process, and negotiation strategies for tax debt settlement.
Summary
Offer in compromise settles tax debt for less than owed. This guide explains eligibility, calculation, application process, and acceptance criteria.
Key Steps
- 1Check eligibility: doubt as to liability, doubt as to collectibility, effective tax administration.
- 2Calculate offer amount: RCP = net equity + future income capacity.
- 3Submit Form 433-A/OIC: complete financial disclosure with application.
- 4Pay application fee: $205 non-refundable, waived for low-income taxpayers.
- 5Track processing timeline: typically 6-24 months for IRS decision.