Pricing & Fees
How Much Does an Offer in Compromise Cost?
Attorney fees, IRS fees, and the 20% deposit explained. Plus how to tell whether an OIC is worth filing in your case.
An Offer in Compromise costs $5,000 to $15,000 in attorney fees, a $205 IRS application fee, and a 20% deposit of the offer amount. The deposit is non-refundable if the offer is rejected.
The short version: there are two costs in an OIC. There is what you pay your attorney to prepare and submit the offer, and there is what you pay the IRS — the application fee and the deposit. Both matter, and the deposit specifically can sting if the offer gets rejected.
Attorney Fees for an Offer in Compromise
| OIC Scope | Typical Attorney Fee | Fee Structure |
|---|---|---|
| Standard OIC (W-2 income, simple finances) | $5,000 – $8,000 | Flat fee |
| Self-employed OIC (Schedule C, complex income) | $7,500 – $12,000 | Flat fee |
| Business OIC (corporate/partnership) | $10,000 – $20,000 | Flat fee |
| OIC with significant assets to value | $10,000 – $15,000 | Flat fee |
| OIC appeal (after rejection) | $3,500 – $7,500 | Flat fee |
| Doubt-as-to-liability OIC (audit dispute) | $10,000 – $25,000+ | Flat or hourly |
Most OICs are flat-fee work because the scope is well-defined: prepare the financial analysis, complete Form 656 and Form 433-A (OIC) or 433-B (OIC), gather and organize the documentation, submit to the IRS, and handle communications with the assigned offer examiner through acceptance, rejection, or appeal.
IRS Fees and the 20% Deposit Trap
The IRS charges a $205 application fee and requires a 20% deposit of your offer amount up front. Both are non-refundable if the offer is rejected — the IRS keeps the money.
This is the part most clients do not understand until it is too late. If you submit a $30,000 offer, you pay the IRS $6,000 with the submission. If the offer is rejected, that $6,000 does not come back. The IRS applies it to your tax debt, which is something, but you do not get a refund.
The deposit only applies to lump-sum cash offers. If you submit a periodic-payment OIC (paid in installments over up to 24 months), you pay the first installment up front instead of a 20% deposit, and you continue making installment payments while the IRS evaluates the offer. Those installments are also non-refundable if the offer is rejected.
There is one important exception. Low-income taxpayers who qualify under the IRS’s Low Income Certification standard are exempt from both the $205 application fee and the 20% deposit. The threshold is based on household size and the federal poverty guidelines. We confirm eligibility before submission.
The Real Math: When an OIC Is Worth the Cost
The whole question here hinges on your Reasonable Collection Potential (RCP). The IRS will only accept an offer that is at or above your RCP — the quick-sale value of your assets plus your future income over 12 months (for lump-sum offers) or 24 months (for periodic payment offers), calculated using the IRS Collection Financial Standards.
If your RCP is materially lower than your tax debt, an OIC can save serious money. A client with $180,000 in IRS debt and an RCP of $28,000 can settle for $28,000 plus our fee of $8,000 — net savings of ~$144,000 after fees.
If your RCP is close to your tax debt, an OIC is the wrong tool. The IRS will reject it, you lose the deposit, you spend the fee, and you are no better off. In that situation, a partial-pay installment agreement or running out the Collection Statute Expiration Date is usually the better play.
Before we accept an OIC engagement, we run the RCP analysis honestly with you. If your offer is unlikely to be accepted, we say so and recommend a different path. We are not in the business of taking your money to file a doomed offer.
Total Cost: A Realistic Example
For a typical self-employed OIC with $95,000 in tax debt and an offer of $18,000:
- Attorney fee: $8,500 (flat fee through acceptance, including one round of negotiation)
- IRS application fee: $205
- 20% deposit: $3,600 (applied to the offer if accepted; lost if rejected)
- Total out-of-pocket before acceptance: $12,305
- Remaining balance due on acceptance: $14,400 (the rest of the $18,000 offer)
- Total to resolve $95,000 debt: $26,705
Net savings vs. paying the full debt: ~$68,000. That math works when the RCP analysis supports the offer amount. It does not work when it does not.
How Brotman Law Quotes OIC Engagements
We charge a flat fee for OIC work because the scope is predictable. The fee covers the RCP analysis, form preparation, documentation, submission, examiner communications, and one round of negotiation through acceptance or rejection. If the offer is rejected and we file an appeal, that is a separate flat fee that we discuss before billing.
If you want to see whether an OIC makes sense in your situation, send us a current account transcript and a one-page summary of your assets and income. We will run the RCP analysis during the initial consultation and tell you honestly whether an offer is the right move — or whether an installment agreement or currently-non-collectible status is a better fit.
For a broader view of OIC mechanics, see our main OIC page. For an OIC vs. installment agreement decision, see our comparison.
Frequently Asked Questions
OIC Cost FAQs
What happens to my deposit if the IRS rejects my offer?
The IRS keeps it and applies it to your tax debt. The deposit is non-refundable under the OIC rules. This is the biggest reason to run the RCP analysis honestly before filing — a rejected offer costs you the deposit plus the attorney fees with no settlement benefit.
Can I file an Offer in Compromise myself without an attorney?
Legally, yes. Practically, most self-filed OICs are rejected because the financial analysis is wrong or incomplete. The IRS uses specific valuation rules that are not intuitive: quick-sale value on assets, Collection Financial Standards on expenses, and statutory rules on future income. Most pro se filers lose the deposit before they realize they made a calculation error.
What is the Low Income Certification fee waiver?
If your household income is at or below 250% of the federal poverty level for your family size, you qualify for the Low Income Certification on Form 656. That waives the $205 application fee and the 20% deposit entirely. We screen for this in every consultation.
How long does the IRS take to decide on an OIC?
Typically 6 to 12 months from submission to decision. Complex offers can take longer. During that time the Collection Statute Expiration Date (CSED) is suspended — meaning the IRS gets extra time to collect if the offer is rejected. This is one of several reasons to run the math before filing.
If my offer is rejected, can I appeal without paying another full fee?
Yes. OIC appeals are filed using Form 13711 within 30 days of the rejection. Our OIC appeal fee is a separate flat fee that is materially less than the original OIC fee. We discuss the appeal fee before recommending whether the appeal is worth filing.
Are OIC settlements taxable as cancellation of debt income?
The settled portion of a tax debt resolved through an OIC is generally not taxable as cancellation of indebtedness (COD) income, because tax debts are excluded from the COD rules under IRC §108. This is one of several reasons an OIC is often a cleaner resolution than ignoring the debt until the IRS writes it off.
Get Started Today
Run the OIC Math First
Before you spend $5,000+ filing an offer, find out whether the IRS will accept it. We run the RCP analysis honestly — and tell you the truth either way.
- Protected by attorney-client privilege
- Flat-fee options where appropriate
- We respond within one business day