How to Successfully Use the IRS Offer in Compromise Program

Author: Jim Buttonow

Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2028 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card

There are over 24 million taxpayers (individual and business) who owe the IRS back taxes. In 2024, only 7,199 taxpayers received an IRS settlement – that is, an IRS offer in compromise. An OIC allows taxpayers to settle their tax bill for less than the amount owed. Why do so few get an OIC?

In this course, find out how the IRS’ offer in compromise program works and understand if your financially distressed client qualifies for an OIC, and if it is the best collection alternative for their circumstances. If they qualify, find out how much it will cost to settle their tax bill. We will cover the OIC rules and walk through a real-life individual and business example of how the OIC works from qualification, to application, through the OIC investigation, and to the final end. We will also get insights as to why many taxpayers do not qualify – and other IRS options that may be more suited to their circumstances.

Publication Date: March 2025

Designed For
All tax professionals who need to resolve unpaid taxes issues for their clients and want to consider the IRS offer in compromise program.

Topics Covered

• IRS Collection and Tax Debt Update
• IRS Collection rules and alternatives to full payment
• Determining ability to pay
• How the IRS Offer in Compromise works
• OIC Process and Case Example
• Business OICs
• Practical consideration and tips

Learning Objectives

• Explain IRS collection trends, including utilization of the IRS offer in compromise program
• Explain the IRS offer in compromise program and how it works
• Identify whether a client qualifies for an offer in compromise
• Explain how to calculate the amount they need to settle their tax bill
• Identify the potential issues that will disqualify a client from an OIC
• Identify other IRS collection alternatives that may better fit your client's circumstances
• Identify approximately how many taxpayers owe the IRS back taxes based on a 2024 estimate
• Identify the percentage of IRS Collection agreements that are ETP/SLIAs
• Identify the standard QSV on vehicles, boats, and planes
• Identify how many days a taxpayer has to request an appeal of an OIC

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
None

Advance Preparation
None