What Is an Offer in Compromise?

An Offer in Compromise (OIC) lets eligible taxpayers settle their tax debt with the IRS for less than the full amount owed. The IRS accepts an OIC only if it believes it can't collect the full debt — based on your income, expenses, assets, and future earning potential. Not everyone qualifies, and the IRS rejects most applications. The process can take a year or more. Beware of companies that promise to settle your debt for "pennies on the dollar" — these are often scams. Start at IRS.gov's OIC pre-qualifier tool.