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Glossary

Offer in Compromise

Offer in Compromise: An Offer in Compromise is an IRS program that lets a taxpayer settle a tax debt for less than the full amount when the IRS agrees it could not collect more.

Updated February 1, 2027

An example

A retiree on Social Security with an old $40,000 balance and no assets settling for an amount the IRS formula produces.

Why it matters to you

It is real and it is narrow. The IRS accepts offers that match its formula, not stories; "pennies on the dollar" ads are selling, not advising.

Where to go next

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See also

  • Currently Not Collectible

    Currently Not Collectible (CNC) is an IRS status in which collection is paused because the IRS has agreed that paying would leave you unable to cover basic living expenses.

  • Installment agreement

    An installment agreement is an IRS payment plan that lets you pay a tax balance monthly, typically over up to 72 months for balances under $50,000.