Thinking About Submitting an Offer in Compromise? Read This First

While submitting an Offer in Compromise to the Internal Revenue Service (IRS) provides an opportunity to settle your federal tax debt for less than the full amount you owe, submitting an Offer in Compromise requires informed and strategic decision-making. If you submit your Offer in Compromise improperly, or if you submit an Offer in Compromise when you don’t qualify, your tax problems could worsen. Here are some important insights from New Jersey tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group.

IRS Issues Warning About Offer in Compromise “Mills” for the 2025 Tax Season

Many people start thinking about submitting an Offer in Compromise when they are preparing their annual income tax returns. Typically, this happens when they realize that they owe the IRS more than they can afford to pay. If you truly cannot afford to satisfy your federal tax liability—or if doing so would result in financial hardship—then submitting an Offer in Compromise could potentially be your best option.

With that said, you need to be careful. This is especially true when it comes to choosing someone to help you. As the IRS recently warned in its “Dirty Dozen” list of tax scams for 2025, “‘mills’ can aggressively promote Offers in Compromise in misleading ways to people who clearly don't meet the qualifications, frequently costing taxpayers thousands of dollars.”

This follows another warning that the IRS published late last year, and the IRS has been warning taxpayers about the risks of working with Offer in Compromise “mills” for years. The IRS warns of “empty promises and steep costs” and also notes that better alternatives will be available in some cases.

When Should You Submit an Offer in Compromise to the IRS?

With this in mind, when should you submit an Offer in Compromise to the IRS? To determine whether it is in your best interests to submit an Offer in Compromise, you will want to consult with a New Jersey tax lawyer. An experienced tax lawyer will thoroughly examine your personal circumstances to identify the options you have available and help you decide which option to choose. If submitting an Offer in Compromise is your best option, your tax lawyer can then assist with preparing your offer and then communicate with the IRS on your behalf.

What if submitting an Offer in Compromise isn’t your best option? From seeking penalty relief to negotiating an installment agreement or seeking currently-not-collectible status, there are a variety of possible alternatives available. Your tax lawyer can assist you with evaluating these alternatives as well before you inform the IRS that you aren’t prepared to pay what you owe.

Schedule a Confidential Consultation with New Jersey Tax Lawyer Kevin E. Thorn

Do you have questions about submitting an Offer in Compromise to the IRS? If so, we invite you to get in touch. To schedule a confidential consultation with New Jersey tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, call 201-842-7696 or tell us how we can reach you online today.