{"id":24998,"date":"2017-06-20T00:00:00","date_gmt":"2017-06-20T00:00:00","guid":{"rendered":"https:\/\/getirshelp.com\/blog\/irs-offer-compromise-tips\/"},"modified":"2026-07-27T15:23:27","modified_gmt":"2026-07-27T15:23:27","slug":"irs-offer-compromise-tips","status":"publish","type":"post","link":"https:\/\/getirshelp.com\/blog\/irs-offer-compromise-tips\/","title":{"rendered":"IRS Offer in Compromise Tips – What You Need to Know"},"content":{"rendered":"

There's the version of tax resolution the late-night commercials sell you. Then there's how it actually works. I'm Darrin Mish, a Tampa tax attorney. I've spent 32 years on the inside of these cases. Here's the real version.<\/p>\n

If you’re facing a bank levy, unfiled taxes, or wage garnishment an \u00a0Offer in Compromise<\/strong><\/a> may be the answer you’re\u00a0looking for to solve your IRS problem.<\/p>\n

But first what is an Offer in Compromise<\/strong><\/a>?<\/p>\n

There are three types of Offer in Compromise<\/a>. Keep reading to learn what they are.<\/p>\n

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Offer in Compromise Based Upon Doubt on Collectibility<\/h2>\n

In this particular type of offer, you would be asserting that there is no way that you will be able to pay the liability to your\u00a0IRS Problem.<\/p>\n

The amount of the offer depends on a math equation that is:<\/p>\n

((Monthly Disposable Income x 12) + Value of Your Assets)) = Amount of Your Offer.<\/strong><\/p>\n

An example would be if you had $300 dollars a month in disposable income x 12. That would be $3600, and assuming you had no equity in assets, your offer amount would be $3600.<\/p>\n

It doesn’t matter how much you owe, it only matters how much you can afford to pay. So your offer amount would be the same whether you owed $20,000 or $200,000 or $2,000,000.<\/p>\n

\"The
The OIC is a program developed by Congress that allows taxpayers to settle for less than they owe the IRS. Sometimes for pennies on the dollar. It is far different for their normal tax payment plan.<\/figcaption><\/figure>\n

Offer in Compromise is Doubt as to Liability<\/h2>\n

In this type of offer, you would be asserting that the liability of the tax is not actually yours. So you should be able to pay less.<\/p>\n

A common scenario would be in the case of Juniors. Take John Smith Sr. and John Smith Jr. with similar social security numbers. If son ends up with dad’s liability, then the son might file an Offer in Compromise. This is\u00a0based on Doubt as to Liability rather than his ability to pay that liability.<\/p>\n

This type of offer is rare because there’s almost always a better way to resolve the issue.<\/p>\n

Offer in Compromise is Effective Tax Administration<\/h2>\n

I don’t know why they call it this, it’s sort of a silly name if you ask me, but it stands for the following situation.<\/p>\n

Let’s say you don’t have much of a monthly disposable income. But you do have equity in assets. For example, maybe you’re retired and living in a home you own the deed to.<\/p>\n

If you sold your home, you would be able to pay in full your tax liability. But if sold it you would have to pay rent, which you couldn’t afford on a monthly basis because you were on a fixed income.<\/p>\n

At this, the IRS makes up less than the full amount of the liability and forgets the balance.<\/p>\n

\"You
You can’t just call the IRS and offer them $5000 to settle a $10,000 liability. It just doesn’t work that way.<\/figcaption><\/figure>\n

Those are the three types of Offer in Compromise deals.\u00a0The only way you can do it is in the context of what I just described.<\/p>\n

If you need IRS Help or have questions about an Offers in Compromise or other issue call me at (888)-438-6474.<\/strong>\u00a0 If you have questions about IRS Forms<\/a> you can view my videos on that page as well.<\/h5>\n

Enjoy the videos!<\/p>\n

I’ve heard the IRS sometimes make deals, is that true?<\/h3>\n