How an Offer in Compromise actually works
An Offer in Compromise is not a negotiation in the colloquial sense. The IRS evaluates offers against a formula — your Reasonable Collection Potential (RCP) — and generally accepts an offer when it equals or exceeds what the IRS could collect from your assets and future income within the collection window. The work of a competent preparer is establishing that figure accurately and documenting it completely.
The formula, in plain terms
RCP is the sum of two parts. First, the net realizable equity in your assets: for most assets, 80% of fair market value (a quick-sale discount) minus any loans secured against them. Second, your future remaining income: monthly income minus allowable living expenses — the IRS substitutes its own published National and Local Standards for many categories rather than your actual spending — multiplied by 12 months for a lump-sum offer or 24 for a periodic payment offer, capped by the remaining collection statute.
Our process, step by step
1. Free pre-check. A short questionnaire on this site (or the IRS's own Pre-Qualifier) gives a rough read on whether an offer is even plausible. If it isn't, we tell you then, at no cost.
2. Engagement. You sign an engagement letter stating the hourly rate, retainer, and scope. No casework begins before this.
3. Financial intake. Our secure portal walks you through everything Form 433-A(OIC) (and 433-B(OIC) for businesses) requires — in plain questions, not IRS form language. You upload supporting documents (pay stubs, three months of bank statements, your latest return) to the portal directly. We never ask for documents by email.
4. Calculation and honest review. We compute your RCP line by line and review it with you. If the number is higher than your debt, an offer is the wrong tool and we say so, with alternatives. If it supports an offer, we proceed.
5. Preparation and signatures. We prepare Forms 2848, 433-A/B(OIC), and 656. You review and e-sign; the CPA counter-signs; only then is a case marked ready to submit. The sequencing is enforced by our systems, not by habit.
6. Submission and follow-through. We submit with the application fee and required initial payment, track IRS correspondence, and respond to requests for additional information. Processing commonly takes many months. If the IRS does not decide an offer within two years, it is deemed accepted by statute — we track that clock too.
What to expect on timing and odds
Per the IRS's own published data, fewer than half of submitted offers are accepted, even counting appeals. Cases with complete, well-documented financials fare better than rushed ones. While an offer is pending you must stay current on filings and estimated payments — falling behind is a common, avoidable reason for return or rejection.