Answers · IRS notices & tax problems
What Is an Offer in Compromise?
An OIC is a statutory settlement under IRC §7122 based on doubt as to liability, doubt as to collectibility or effective tax administration.
How it works
The rule, and what it turns on.
Collectibility offers generally focus on reasonable collection potential from assets and future income, using IRS standards and eligibility requirements.
Example
$100,000 debt with little equity/disposable income may warrant OIC analysis; substantial equity can make a low offer unrealistic.
Common mistakes
What we see go wrong, and what we do instead.
- “Pennies on the dollar” marketing assumptions.
- Incomplete financial disclosure.
A better approach
- Calculate reasonable collection potential before filing Form 656.
Authority
Where this comes from, so you can check it.
IRC §7122; Treas. Reg. §301.7122-1; Form 656 and IRS Offer in Compromise guidance.
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
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