Interest accrues daily until your balance is paid.

Installment Agreements vs Offer in Compromise

Understanding the key differences between IRS installment agreements and offers in compromise helps taxpayers choose the most effective resolution strategy for their tax debt.

Installment Agreements

An installment agreement allows taxpayers to pay their tax debt over time through monthly payments. This option is generally easier to qualify for and maintains the full tax liability.

Key Benefits

  • Easier qualification requirements
  • Stops collection actions
  • Flexible payment terms
  • Can be set up online for smaller debts

Offer in Compromise

An offer in compromise allows taxpayers to settle their tax debt for less than the full amount owed. This option requires meeting strict qualification criteria but can significantly reduce tax liability.

Key Benefits

  • Potential significant debt reduction
  • Fresh start opportunity
  • Stops collection actions during review
  • Final resolution of tax debt

Which Option is Right for You?

The choice between an installment agreement and offer in compromise depends on your financial situation, ability to pay, and long-term goals. Professional tax resolution services can help evaluate your options.