Offer in Compromise: Myths vs. Reality

Updated: 2025-08-16

Despite late-night ads, not everyone qualifies for an OIC. The key is your Reasonable Collection Potential (RCP)—a formula based on income, allowable expenses, equity in assets, and future earning potential.

Myths

• Myth: “Everyone can settle for pennies.”
• Reality: Only if your RCP is below what you owe—otherwise other options fit better.
• Myth: “Filing an OIC stops all enforcement forever.”
• Reality: It may pause some actions; timely filings and payments are still required.