The IRS accepts offers in compromise when the package proves the offer equals or beats what the government could collect on its own. That means an accepted offer is a construction project, and the building happens before Form 656 ever gets mailed.

Play One: Value the Assets Properly

The IRS values assets at quick-sale value, typically 80 percent of fair market, minus the loans against them. Every asset deserves that treatment documented: the car with the payoff statement attached, the house with comparable sales, the retirement account with the tax and penalty haircut the IRS allows. Sloppy valuations cost real money - an examiner who has to guess will guess high.

Dissipated assets get handled head-on. If money was spent or property sold while the debt was outstanding, the examiner can add it back into the calculation. Knowing that rule means addressing the history in the package instead of letting the IRS discover it and assume the worst.

Play Two: Fight for the Expenses

Disposable income drives half the formula, and disposable income is income minus allowable expenses under IRS standards. The standards have categories people miss: court-ordered payments, term life insurance, current-year taxes, secured debt payments. Necessary expenses above the standards can be argued with proof - documented medical costs being the classic example. Every dollar of allowed expense cuts the offer amount by twelve or twenty-four dollars depending on the payment structure.

Play Three: Time the Filing

Offers freeze a snapshot of your finances. Filing during a low-income stretch, after a job loss, or before a foreseeable income jump produces a permanently better number than filing six months later. The collection statute matters too, in the other direction: a pending offer pauses the 10-year clock, so an offer filed late in the statute can cost more than it saves. That tradeoff gets calculated, not guessed.

Then Defend It

Months into the investigation, the offer examiner will push back on something. Prepared cases answer with documents already organized for exactly that fight, and rejected offers get appealed - Appeals reverses offer rejections regularly when the package was solid. That is the whole approach: build it right, then defend what you built. If you want your numbers run honestly before anyone files anything, call me.