Tax · 5 min read

Offer in Compromise Explained

An offer in compromise is a tax resolution option that may allow a taxpayer to settle tax debt for less than the full amount owed. However, not everyone qualifies.

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The IRS generally reviews ability to pay, income, expenses, assets, and overall financial situation.

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An offer in compromise may require:

Filed tax returns
Financial disclosure
Income documentation
Asset review
Expense review
Application forms
Initial payment
Ongoing compliance

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Taxpayers should be cautious of companies that promise easy settlements. Qualification depends on financial facts.

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A tax professional can help determine whether an offer in compromise is realistic or whether another option, such as a payment plan, may be better.

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