Offer in Compromise: Can you really pay less than you owe, or is it a scam?
- Feb 4
- 3 min read
You've probably heard the radio ads or seen late-night commercials: "Owe the IRS $50,000? We can get you to pay only $500!"
It sounds incredible. And when something sounds too good to be true, your instinct tells you to be wary. You are right to be.
The reality is that the program to reduce your debt exists, it's called the Offer in Compromise (OIC), and it's part of the IRS's Fresh Start initiative 1, 2. However, it is not a "magic wand" that works for everyone; it's a strict mathematical calculation.
At True Tax Relief, we believe in the truth, not false promises. Here we explain, without fine print, what this program is and if you really qualify.
What exactly is the Offer in Compromise (OIC)?
The OIC is a legal agreement that allows you to settle your tax debt for a lower amount than you originally owe 2.
Why would the IRS agree to receive less money? They don't do it out of kindness. They do it out of pragmatism. The IRS will accept your offer if, after analyzing your finances, they determine that the amount you offer is the maximum they could reasonably collect from you before the legal time limit to do so expires 2.
If the IRS sees that you have the money or assets to pay the total, they will reject the offer.
The difference between a "Scam" and a "Strategy"
The problem is not the program; it's the companies that "guarantee" you results without even reviewing your numbers.
The Red Flag: If someone promises you qualify for the program before seeing your income, expenses, and assets, run. No one can guarantee IRS acceptance 3.
The True Tax Relief Approach: We don't sell impossible dreams. We conduct an initial Triage and Diagnosis. First, we analyze your real financial situation. If you qualify for an OIC, we will fight for it. If not, we will tell you the truth and look for another viable solution 3, 4.
Who really qualifies for a "Fresh Start"?
To approve an offer, the IRS analyzes three key factors under the Fresh Start program 2:
Your Ability to Pay: Your future income minus your necessary living expenses.
Equity in Assets: Do you have property, savings accounts, or vehicles you could sell to pay?
Economic Hardship: If paying the total debt would leave you without money to cover basic needs.
If you owe more than $10,000 and your assets do not cover the debt, your chances of qualifying increase 2, 5.
"And if I don't qualify, am I lost?"
Absolutely not. And this is the secret that the "snake oil salesmen" don't tell you.
If you don't qualify to reduce the total debt, there are other powerful tools to stop levies and regain your peace of mind:
Installment Agreements: If you owe up to $50,000, we can negotiate a plan for up to 72 months (6 years) without the need to submit complex financial statements 2.
Currently Not Collectible (CNC) Status: A temporary pause in collections if you are going through a severe financial crisis 6.
The Truth Will Give You Peace
You don't need pretty lies; you need a solid plan. Resolving a debt with the IRS is not about tricks; it's about using the law to your advantage.
At True Tax Relief, our job is to be that "Expert Friend" who sits down with you, reviews the numbers, and tells you exactly what can be done 7.
Want to know the truth about your options? Stop guessing and start resolving. Upload your IRS letter or schedule a quick call.
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