Offer in Compromise Help in Williamson County, Texas
Quick Answer: An Offer in Compromise (OIC) allows you to settle your IRS tax debt for less than you owe if you can prove you cannot pay the full amount. The IRS accepted 17,890 offers in 2023 with an average settlement of 31 cents on the dollar.
An Offer in Compromise is an agreement between you and the IRS that settles your tax liability for less than the full amount owed. It's designed for taxpayers who genuinely cannot pay their full tax debt or where paying would create financial hardship.
Eligibility Requirements
- Filed all required tax returns
- Made all required estimated tax payments for the current year
- Not in an open bankruptcy proceeding
- Have a valid extension for the current year (if applicable)
- Employer has made tax deposits for the current quarter (if applicable)
The Process
- 1Complete Form 656 (Offer in Compromise) and Form 433-A (Collection Information Statement)
- 2Calculate your Reasonable Collection Potential (RCP)
- 3Submit $205 application fee (waived for low-income)
- 4Include initial payment (20% lump sum or first monthly payment)
- 5IRS reviews your offer (typically 6-12 months)
- 6If accepted, complete payment terms and stay compliant for 5 years
Expected Timeline
6-12 months for IRS decision, then payment terms vary
Advantages
- Settle debt for less than full amount owed
- Stop collection activity during review
- Fresh start after completion
- Lien released after payment terms completed
Considerations
- Low acceptance rate (approximately 33%)
- Long processing time
- Must stay compliant for 5 years after acceptance
- Non-refundable application fee
- Tax refunds may be applied to debt during compliance period
Frequently Asked Questions
What is the OIC acceptance rate?
The IRS accepts approximately 33% of all Offer in Compromise applications. Proper preparation and accurate financial documentation significantly improve your chances.
How much does an OIC cost?
The IRS charges a $205 application fee plus an initial payment (20% of your offer for lump sum, or first monthly payment for periodic offers). Low-income taxpayers may qualify for fee waivers.
Can I keep my home with an OIC?
Yes, in many cases. The IRS considers equity in your home when calculating your offer amount, but accepting an OIC doesn't require selling your home.
Get Help Now
See if offer in compromise is right for your Williamson County tax situation.