Offer in Compromise

Offer in Compromise

An Offer in Compromise is the Golden Goose in Tax Resolution. It is what you hear about on all of the ads from the big National firms when they advertise “Settling for pennies on the dollar”. The good news is: this is 100% real. The bad news is: they are difficult to qualify for. But when you qualify, you are able to “offer” an amount you can afford to satisfy your entire tax liability, and it even includes the penalties and interest. And yes, the amount you pay is based on what you can afford, not the amount you owe! The program allows an eligible taxpayer to pay what they can afford to pay regardless of the amount they owe.

The Offer in Compromise is the essence of fresh start; once an offer is accepted and paid the taxpayer is then current with all their tax liabilities. We are able to determine your eligibility for the Offer in Compromise program and advise you on some strategies to become qualified, when appropriate.

The IRS will look at the likelihood that they will be able to collect the full amount owed, and they will consider the amount that you are realistically able to pay. As stated in the Internal Revenue Code: “We will accept an Offer in Compromise when it is unlikely that we can collect the full amount owed and the amount you offer reasonably reflects the collection potential…” (Internal Revenue Code §7122).

At COTTS LAW, we are very specific about the types of case for which we will apply for an Offer in Compromise – we do not submit frivolous Offers, so we have a very good “winning percentage” – our Offers get accepted at a very high rate.

Navigating Tax Debt: Understanding Offer in Compromise

Tax debt can be an overwhelming burden, and when you’re unable to pay your full tax liability, it can create a financial hardship that affects various aspects of your life. That’s where the IRS Offer in Compromise (OIC) program comes into play – it’s often hailed as the “Golden Goose” in Tax Resolution. This program allows you to settle your tax debt for less than the total amount you owe, offering you a fresh start and financial relief. In this article, we’ll explore the ins and outs of the Offer in Compromise, its eligibility criteria, challenges it poses, and why COTTS LAW stands out as a top choice among Tax Law firms in Texas to handle OIC situations.

Understanding Offer in Compromise

The Offer in Compromise program provides a legitimate option for individuals or businesses who can’t afford to pay their full tax liability. It takes into consideration your unique financial situation, including your ability to pay, income, expenses, and asset equity. The essence of this program is simple – you “offer” an amount you can realistically afford to pay, which includes your tax debt, penalties, and interest. The critical point here is that the amount you pay is based on what you can actually afford to pay, not the amount you owe.

As per the Internal Revenue Code (IRC) §7122, the IRS will accept an Offer in Compromise when it is unlikely they can collect the full amount owed, and the amount you offer reasonably reflects the collection potential. 

In essence, this program provides a pathway for taxpayers to become current with their tax liabilities.

Biggest Challenges in Offer in Compromise Situations

While the Offer in Compromise program offers significant benefits, it’s not without its challenges. The biggest hurdles in OIC situations include:

Qualification Difficulty

Qualification Difficulty

OICs can be challenging to qualify for. The IRS evaluates the likelihood of collecting the full amount owed and your ability to pay. This means not everyone qualifies for the program.

Stringent Eligibility Criteria

Stringent Eligibility Criteria

To be eligible, you must have filed all required tax returns, made all necessary estimated payments, and not be in an open bankruptcy proceeding. Meeting these criteria can be complicated.

Complex Application Process

Complex Application Process

The application process involves extensive documentation, including Form 433-A (OIC) or 433-B (OIC) for businesses, Form 656(s), a non-refundable application fee, and an initial payment.

Payment Options

Payment Options

The initial payment varies based on your offer and the payment option you choose, such as Lump Sum Cash or Periodic Payment. Choosing the right payment option can be confusing.

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Dealing with the Challenges

Navigating these challenges requires expertise and a deep understanding of the tax code. That’s where COTTS LAW, a leading Tax Law firm in Texas, excels.

At COTTS LAW, we specialize in OIC cases and have a high success rate because we only submit legitimate and well-documented offers. We understand the intricate eligibility criteria and help clients meet them effectively.

Our experienced team simplifies the complex application process, ensuring all necessary forms and documentation are submitted accurately. We also assist in selecting the right payment option, optimizing your chances of a successful OIC.

Why Choose COTTS LAW for Your Offer in Compromise?

When it comes to dealing with OIC situations, choosing the right Tax Attorney can make all the difference. COTTS LAW stands out for several reasons:


We specialize in OIC cases and have a proven track record of success. Our team understands the nuances of the program and stays updated with changes in tax laws.

High Acceptance Rate

We pride ourselves on our high acceptance rate for OIC submissions. We don’t submit frivolous offers, ensuring the chances that our clients’ offers will get accepted.


With years of experience in tax resolution, we know the ins and outs of the IRS, allowing us to navigate the complexities of OICs effectively.

Client-Centric Approach

We prioritize our clients’ needs and financial well-being. Our personalized approach ensures you receive the best possible guidance tailored to your situation.

Commitment to Success

Our commitment to helping clients achieve financial freedom and a fresh start drives us to deliver exceptional results in every OIC case we handle.

In the words of the IRS, “We will accept an Offer in Compromise when it is unlikely that we can collect the full amount owed and the amount you offer reasonably reflects the collection potential.” This statement underscores the significance of having a qualified Tax Attorney like Daniel Cotts and COTTS LAW by your side to ensure your OIC offer reasonably reflects your collection potential.


Offer in Compromise is a valuable program for those burdened by tax debt, offering them a way to settle their liabilities and start fresh. While it presents challenges, having a knowledgeable Tax Law Firm like COTTS LAW in your corner can significantly increase your chances of success. With our expertise, experience, and commitment to your financial well-being, we’re a top choice for handling OIC situations in Texas. Don’t let tax debt overwhelm you – reach out to COTTS LAW, and let us help you find a path to financial freedom.

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