For taxpayers in Oklahoma City, few programs are as well-known—or as misunderstood—as the IRS Offer in Compromise (OIC). This settlement option allows taxpayers to resolve their tax debt for less than the full amount owed. You may have seen ads on TV claiming people settled for “pennies on the dollar.” While that’s sometimes true, the OIC is not a free pass, and only certain taxpayers qualify.

At Summit Tax Relief, we specialize in helping Oklahomans with $25,000+ tax debt determine whether they qualify for an Offer in Compromise and prepare strong submissions that give them the best chance of success.

This guide will explain who qualifies, how the IRS reviews applications, and what it takes to get an OIC approved.

1. What Is an Offer in Compromise?

An OIC is an agreement between you and the IRS that settles your tax liabilities for less than the full balance. The IRS only accepts offers when it believes it’s the most it can reasonably expect to collect.

2. Types of Offers in Compromise

There are three main categories:

1. Doubt as to Collectibility

Most common type.

IRS believes you cannot pay full balance before the statute expires.

Based on income, expenses, and asset equity.

2. Doubt as to Liability

Used when there’s legitimate doubt about whether you actually owe the debt.

Requires strong documentation and legal arguments.

3. Effective Tax Administration (ETA)

Rarely granted.

For cases where you technically could pay, but doing so would cause severe economic hardship (e.g., liquidating medical savings of a disabled person).

3. IRS Formula: Reasonable Collection Potential (RCP)

The IRS calculates your RCP by adding:

Net realizable equity in assets (home, vehicles, retirement accounts).

Future income (disposable monthly income multiplied by 12 or 24 months depending on payment type).

If your offer equals or exceeds this figure, it may be accepted.

Example:

An Oklahoma City family owes $75,000. Their equity in assets is $5,000. Their monthly disposable income is $150. RCP = $5,000 + ($150 × 12) = $6,800.

They may qualify for an OIC of around $7,000.

4. Who Qualifies for an OIC in Oklahoma?

You may qualify if:

You have filed all required tax returns.

You are not in bankruptcy.

You’ve received at least one bill for your tax debt.

You can demonstrate inability to pay full balance through income/asset analysis.

Oklahoma Profiles:

A self-employed contractor with declining income.

A family facing high medical costs.

A small business owner whose assets are fully leveraged.

5. Who Doesn’t Qualify?

The IRS will reject your OIC if:

You have unfiled returns.

You can afford to pay in full through an installment plan.

You submit a lowball offer without supporting financials.

6. The Application Process

Form 656 – The official OIC form.

Form 433-A (OIC) – Collection information for individuals.

Application fee and initial payment (waived for low-income taxpayers).

Supporting documentation (bank statements, pay stubs, asset appraisals).

Processing can take 6–12 months, during which the IRS may suspend collection.

7. Summit Tax Relief’s Role in OIC Submissions

OIC acceptance rates are low (around 30–35% nationally). Success depends on preparing a case that aligns with IRS standards.

At Summit, we:

Pull IRS transcripts to confirm balances and compliance.

Conduct detailed financial analysis to calculate realistic offer amounts.

Prepare and submit comprehensive documentation.

Negotiate with the IRS to ensure your case is properly considered.

Conclusion

The IRS Offer in Compromise is powerful, but it’s not for everyone. Knowing who qualifies—and how to present your case—is the difference between success and rejection.

If you owe $25,000 or more, Summit Tax Relief can evaluate your eligibility and guide you through every step of the process.

📞 Call 833-477-4911 today for a consultation.

📣 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.