If you owe the IRS somewhere between $50,000 and $500,000, you have four real options: an installment agreement, an Offer in Compromise, Currently Not Collectible status, or running out the collection statute. The right one is arithmetic, not preference — and the wrong one costs a year and a deposit.
The three numbers that decide it: what you owe, what your assets would bring at quick sale, and your monthly disposable income under the IRS Collection Financial Standards (which cap living expenses — your actual budget does not control). Run those and the decision tree is short:
If you can full-pay within the statute — installment agreement
Under $50,000 assessed, a streamlined agreement needs no financial disclosure and sets up in a day. Above it, you disclose on a Form 433 and negotiate. The agreement stops levies, and for many businesses that is the entire point — predictable payments instead of a frozen bank account. If the payment the Standards produce would never retire the debt before the statute expires, you are actually in partial-pay territory, which is quietly one of the best deals in the code: payments end when the clock ends.
If assets + 12–24 months of income are worth less than the debt — Offer in Compromise
That is the Reasonable Collection Potential test, and when it favors you, the IRS is required by its own procedures to accept an offer at RCP. When it does not favor you, an OIC is a donation of six to twelve months and a 20% deposit. This is the calculation to run honestly before anyone files anything.
If paying anything means missing rent — Currently Not Collectible
CNC parks the account: no payments, collection holds, and the ten-year clock keeps running. The IRS revisits when your income rises. For taxpayers late in the statute with low income, CNC quietly converts into option four.
If the statute is close — sometimes the best move is time
The Collection Statute Expiration Date ends collection ten years after assessment. OICs, bankruptcies, and CDP hearings pause that clock; installment agreements and CNC do not. Late-statute cases get planned around the date — and the date itself is worth verifying from transcripts, because IRS CSED calculations contain errors more often than you would think.
Where bankruptcy fits: income taxes can be dischargeable when they are old enough and the returns were filed on time — a real lane for the right facts, and we will tell you when it beats every IRS option, because sometimes it does.
How engagements work
Many matters like this one run as a monthly flat-fee engagement: one number, agreed up front, that covers the work — agency contact, deadlines, document responses, strategy — until the matter resolves. Shorter, well-defined projects are often a one-time flat fee instead, and some matters genuinely fit hourly billing better. We will tell you which you are looking at on the first call, before you commit to anything. If you want the details first, see how we price our work.
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Start with the numbers: what the Fresh Start tools actually are · if you cannot pay at all · the full collections practice.
By Sam Brotman, JD, LLM, MBA — managing attorney, Brotman Law. CA Bar No. 274966. Last updated August 29, 2026.
