How to Settle Tax Debt? Learn how to settle tax debt with the IRS using an Offer in Compromise.
How to Settle Tax Debt? Learn how to settle tax debt with the IRS using an Offer in Compromise. Can you settle IRS tax debt? Yes. It is possible to settle tax debt for less than you owe with the IRS. You use a solution known as an Offer in Compromise or OIC. This is the solution you may hear advertised that boasts you can “settle tax debt for pennies on the dollar.” It’s worth noting, however, that the IRS doesn’t just hand OICs out to anyone who requests one. The IRS must have a reasonable expectation that they cannot collect the full amount owed. You basically need to prove that the reduced settlement amount is the maximum amount they can expect to receive. How to settle tax debt step by step 1. First you apply for an Offer in Compromise (OIC) using Form 656. 2. You must pay a $186 application fee to apply. 3. You must also provide a full financial disclosure that details all your income, expe...