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Offer in Compromise: how taxpayers can settle IRS debt for less
Summary
An IRS instructional video explains Offer in Compromise (OIC) basics: an OIC lets qualifying taxpayers settle tax debt for less than the full amount by demonstrating their true ability to pay; viewers are directed to irs.gov/oic and the Form 656-B booklet for current forms and guidance.
An Offer in Compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles a tax debt for less than the full amount owed, the presenter explains. "An offer in compromise, or offer, is an agreement between you, the taxpayer, and the IRS that settles a tax debt for less than the full amount owed," the presenter says, stressing the offer should reflect the taxpayer’s true ability to pay.
The video frames the OIC as an alternative for taxpayers who cannot pay their full tax liability and outlines that eligibility depends on assets, income, expenses and future earning potential. Viewers are told to consult the OIC booklet (Form 656-B) and the IRS website for current rules and to use the guidance in the playlist to calculate a potential offer before submitting.
