Offer in Compromise Attorney Fees: What’s Reasonable and How to Find Trusted Help
An IRS Offer in Compromise (OIC) program is a legitimate way to settle your tax debt. It allows you to pay less than what you owe, but still meets your IRS obligations. OIC is typically available to those who cannot afford to pay in full, but the application process is complicated.
Working with a tax attorney can prove invaluable in these situations, especially when you have a great deal on the line, but the cost varies.
To help you know what to actually expect, we’ll break down OIC attorney fees and what to expect when you contact a tax resolution professional. To get help now, use TaxCure to search for a licensed tax pro who specializes in tax resolution work.
- OIC attorney costs are based on case complexity and experience. Fees usually range from $4,000 to $15,000, but may be higher or lower.
- Attorneys, CPAs, and EAs can all handle these cases – but for best results, look for a pro with proven Offer in Compromise experience.
- Avoid firms that make promises before reviewing your finances. You want a professional who will really help you, not a salesperson who strongarms you into paying for their services.
- A qualified pro can help you determine whether you are truly likely to qualify for an OIC and build the strongest possible case for the IRS.
What an Offer in Compromise Really Is
An Offer in Compromise is an agreement between you and the IRS to resolve a federal tax debt for less than you currently owe. The IRS does not haggle or make deals. However, if a taxpayer can demonstrate that they cannot pay the debt in full due to their financial situation, the agency may agree to reduce what is owed.
You present the IRS with an offer that is less than the total amount owed on your tax bill. The IRS will consider this offer and then accept or decline it. If they accept, you pay what you offered, and the IRS waives the rest. If they reject your offer, you have appeal rights.
Approval depends on your financial reality – what your income is, the equity in your assets, and what savings you have. The IRS also takes into account your expenses, but only up to amounts that are approved by the IRS. For example, if the IRS expects someone in your area to spend $2000 a month on housing expenses, but you spend $3000, the IRS will not take into account the extra $1000. In other words, the IRS will expect you to make changes to your budget and devote those extra funds to your tax debt.
Basic Offer in Compromise Qualifications (and a Quick Self-Test)
General criteria for the IRS to accept your OIC include:
- You filed all required tax returns – typically for the last five years.
- You have filed or requested an extension for your current-year return.
- You're up to date on quarterly estimated payments.
- You are not in an open bankruptcy proceeding.
- You are an employer and made tax deposits for the current and past two quarters before you apply.
If you don't meet these criteria, the IRS will not even review the offer. They'll just send it back. Then, you must meet the financial criteria. The IRS carefully reviews info on your income, expenses, assets, and debts. Consider this, but keep in mind that every situation is unique.
- You may qualify if your total IRS debt is more than the equity in your assets plus one to two years of disposable income.
- You usually won't qualify if you have substantial equity in your assets or significant disposable income.
An OIC tax attorney can help you determine if you are likely to be eligible, and they can leverage their experience to help improve your odds of receiving approval. Once an experienced tax professional understands your financial situation, they can give you a good idea of whether you'll qualify – but if someone is making guarantees before looking at your situation, that's a red flag you should look for someone else.
What an OIC Attorney or Tax Professional Actually Does
An OIC attorney provides in-depth knowledge and extensive experience. Consider some of the steps your attorney will take to review your tax debt.
Providing an In-Depth Review Process
Your attorney completes a thorough in-depth review of your situation. That includes pulling all IRS transcripts and analyzing all aspects of your income and finances. They'll also determine whether you meet basic compliance requirements (such as having all the required returns filed).
Explaining All of Your Options
Not every situation can result in an OIC. If your attorney does not believe an OIC fits your situation, they will guide you in determining which strategy may benefit you the most. A qualified tax attorney will clearly discuss all the options, ensuring you fully understand the cost and implications of each one. That includes installment agreements and currently-not-collectable status.
Determining a Realistic Offer
If you move forward with the offer, your attorney will compare your financials to the IRS Collection Financial Standards, help you put together the application and documentation, and send an offer to the IRS. If applicable, they'll help you make changes to your finances that could improve your offer, before you apply.
Avoiding Collection Actions
When you apply for an OIC, the IRS must stop any pending collection actions, but they don't necessarily need to stop in-progress levies (for example, if your wages are being garnished). A tax attorney can help to ensure that you don't face unexpected collection actions and, whenever possible, get the IRS to stop in-progress levies.
Typical Offer in Compromise Fees- What’s Reasonable?
There are a lot of benefits to hiring a tax professional to help with your offer, but there's a cost involved. Exact fees vary based on the complexity of your finances, the documentation required, prep work (for example, filing back taxes), the professional's internal cost structures, and other factors. Here are the average ranges, but keep in mind that you may pay more or less.
- Simple individual cases: $4,000–$6,000
- Multiple years or business debts: $7,500–$10,000+
- Complex or appeal-level cases: up to $15,000 or more
Some tax professionals may assess an analysis fee, ranging from $500 up to $1500. Then, they provide you with your options and a more accurate estimate of total costs.
Pricing structures for OIC services
Attorney costs vary, but so do pricing structures. Flat-free pricing is very common when it comes to OIC work and tends to be the ideal route for many taxpayers. However, some attorneys charge up-front retainers and then bill you for time as they go along. Be aware of tax relief firms that charge fees based on how much you save on the settlement.
Who Can Represent You – Attorneys, CPAs, and EAs
Only tax attorneys, Certified Public Accountants (CPAs), and Enrolled Agents (EAs) are the only people federally authorized to represent you, the taxpayer, before the IRS, with very limited exceptions. When looking for tax relief services, you need one of these pros, but for best results, you should ensure they're experienced with your situation.
How to Find Experienced Offer-in-Compromise Pros on TaxCure
TaxCure's search features make it easy to search for professionals based on their experience with different types of taxes and resolution options – here's a step-by-step look at the process.
- Start a search on the current page or the home page.
- Select IRS, state, or both, depending on which type of taxes you owe.
- Select up to three tax problems. For example, IRS back taxes.
- When results appear, use the side main to filer by solution experience – for example, Offer in Compromise.
- Review each professional’s profile — see their background, experience, and reviews.
TaxCure provides an easy way to compare attorneys, CPAs, and EAs side-by-side. You will learn who to work with, what they can do for you, and what working with them means for your case and needs. You will then be able to directly connect with a true tax hero who's local and experienced in your situation.
Learn more about how to use TaxCure.
Why the Investigation Stage Matters
There are many well-qualified tax professionals with proven track records who can help you navigate this process. But unfortunately, there are also many non-qualified people looking for your money. To protect yourself, you need to know how to search for legitimate tax relief help and how to spot potential risks.
Legitimate professionals will:
- Never guarantees results without understanding your situation first.
- Let you know who's working your case and provide you with direct contact.
- Provide upfront, transparent information on pricing.
- Be able to answer your questions.
- Ensure you meet the compliance requirements to apply for an offer.
- Review all documents thoroughly to avoid errors.
- Calculate what the IRS might accept, so you are not wasting your time.
Anyone who guarantees acceptance or quotes you a rate of how much you could save on your tax, without any type of financial analysis, is not likely to be legitimate.
Red Flags and Unreasonable Pricing Models
Be skeptical of companies offering fast solutions or guaranteed settlements in the first phone call. Here are several red flags to look for, and when you find them, these are the organizations you want to avoid:
- “Guaranteed approval” or “pennies on the dollar” promises before financial analysis.
- Fees are based on a percentage of your supposed “savings.”
- No transcript review or financial questionnaire before quoting their service fees.
- High upfront payments without specific deliverables.
- No access to the actual attorney, CPA, or EA doing the work.
These red flags are common issues with national call-center firms that spend a lot of money on marketing debt relief.
Get Help With IRS Offer in Compromise Now
To find help, start your search on TaxCure now. You deserve high-quality help, and this site makes it possible for you to get the help you need.
FAQs on Offer in Compromise Fees
How much is a basic offer in compromise application?
Individual applicants typically pay $4000 to $6000. However, if you have very limited income and assets, you may pay less, and you may pay more if you need several years of returns filed or have more complicated financing.
How do attorneys determine what to charge for an offer in compromise?
Attorneys base their fees on the complexity of your application (the longer it takes, the more it costs), market rates in your area, their experience levels, and other factors.
Will an attorney give me an upfront quote?
It depends. Some attorneys will give you an upfront quote – especially if they use a flat-fee pricing model. Others will give you an idea of the cost, but they'll explain that unexpected events could increase or decrease the cost. The most important point is transparency – you need to know what they're charging and why.