If you owe the IRS more money than you can realistically afford to pay, you’ve probably wondered:

“Can I settle my IRS tax debt for less?”

The answer: Yes — if you qualify.

Through the IRS’s Offer in Compromise (OIC) program, some taxpayers are able to settle their tax debt for pennies on the dollar. But the process is complex, the IRS is strict, and very few people qualify without professional help.

At Summit Tax Relief, we’ve helped hundreds of clients across the country settle tax debts — ethically, strategically, and for significantly less than they originally owed.



This guide explains everything you need to know about settling IRS tax debt in 2025.

What Is an Offer in Compromise?

An Offer in Compromise is an agreement between the taxpayer and the IRS to settle a tax debt for less than the full amount owed.

It’s not a loophole or gimmick. It’s a legitimate IRS program designed for taxpayers who:



• Cannot afford to pay their full tax debt, or
  
  
• Can demonstrate that full collection would cause economic hardship
  
  

But the IRS only accepts OICs when it believes it cannot collect the full amount within the time allowed by law.

Who Qualifies for an Offer in Compromise?

You may qualify if:



• You have limited income and few assets
  
  
• Paying the full debt would cause financial hardship
  
  
• You are in tax compliance (all required returns filed)
  
  
• You have submitted Form 433-A (OIC) and Form 656
  
  
• Your reasonable collection potential (RCP) is less than your total debt
  
  

The lower your income, disposable cash flow, and equity — the better your odds.

Who Doesn’t Qualify?

The IRS will reject your OIC if:

• You haven’t filed all your required returns
  
  
• You’re in active bankruptcy
  
  
• You can afford to pay in full or via Installment Agreement
  
  
• You don’t respond to their requests for documentation
  
  
• You offer a “lowball” amount without proof
  
  

National Case Example

Client: Independent contractor, California

• Owed $87,000 in back taxes from 2016–2021
  
  
• No retirement savings, minimal home equity
  
  
• Monthly disposable income: $25
  
  
• Summit submitted full OIC with IRS Forms 433-A (OIC) and 656
  
  
• IRS accepted $2,100 settlement — full resolution

How the IRS Calculates Your Offer

The IRS uses a formula called Reasonable Collection Potential (RCP):

RCP = Net Realizable Equity in Assets + Monthly Disposable Income x Multiplier

• If full payment = possible → they won’t settle.
  
  
• If RCP < balance owed → you may qualify.
  
  

Example:

• Assets: $1,000 in savings, $0 in home equity
  
  
• Disposable income: $50/month
  
  
• Multiplier: 12 (if lump sum offer)
  
  
• Total RCP: $1,000 + ($50 × 12) = $1,600
  
  
• IRS may accept $1,600 offer on $47,000 debt
  
  

Use our companion OIC Estimator Tool to run your own numbers.

How to Apply for an OIC

You must submit:



1. Form 433-A (OIC) – financial disclosure form
   
   
2. Form 656 – offer form
   
   
3. $205 application fee (unless low-income)
   
   
4. Initial payment (usually 20% of offer amount)
   
   

Your financials will be under a microscope — bank statements, pay stubs, mortgage info, car loans, and more.

What Happens After You Apply

• IRS may take 6–12 months to review
  
  
• Collections are paused during review
  
  
• If approved, you’ll pay according to the agreement
  
  
• If rejected, you can appeal within 30 days
  
  

Offer vs. Installment Agreement vs. CNC

Why Work with Summit Tax Relief

• National IRS representation — all 50 states
  
  
• Led by a licensed CPA (Marc Boulanger)
  
  
• Flat-fee pricing — no surprises
  
  
• We handle Form 433-A (OIC) preparation, IRS correspondence, and appeals
  
  
• 15+ years of experience solving high-stakes tax problems
  
  
• You get a real strategist — not a call center

Internal Links

• Offer in Compromise Help
  
  
• IRS Form 433-A Complete Guide
  
  
• Who Qualifies for an OIC?
  
  
• IRS Wage Garnishment Guide

Call to Action

Owe the IRS more than $25,000? We’ll run the numbers and see if you qualify to settle for less.

📞 Call Summit Tax Relief at (833) 477-4911
📅 Schedule Your Free Strategy Call

FAQ

📣 About the Author

Marc Boulanger, CPA is the founder of Summit Tax Relief LLC, a boutique tax resolution firm based in Oklahoma City, OK and trusted by high-income individuals and business owners across Oklahoma.

He is the author of Oklahoma Taxpayers' Guide: Taking A Stand Against the IRS: A Step-by-Step Plan for Dealing With Tax Collectors and Unfiled Returns Without Going Broke, available now on Amazon. The book offers a step-by-step plan for resolving IRS tax debt without losing your business, your home, or your peace of mind.

With over a decade of experience resolving high-stakes IRS and State tax matters, Marc brings strategic insight to complex cases involving wage garnishments, bank levies, unfiled returns, and six-figure tax debts. He is known for helping clients reduce or eliminate tax liabilities through expertly negotiated settlements and compliance plans.

Marc is a Certified Public Accountant licensed in California and Oklahoma and holds the designation of Certified Tax Representation Consultant. He is a member of the American Society of Tax Problem Solvers (ASTPS) — the national organization founded by the educators and practitioners who have trained thousands of CPAs, EAs, and tax attorneys in IRS representation strategy.

Every case is handled with discretion, proven methodology, and direct CPA-led representation — not call center scripts.

📍 Learn more at www.summittaxrelief.com or call (833) 477-4911.