Offer in compromisevsPayment plan
What you pay
Less than you owe, if acceptedThe full balance plus interest
Cost to apply
$205 fee plus a first payment$0 to $178 setup fee
Odds
About 1 in 7 accepted in FY2025Most people who can pay over time can get one
The short answer
An offer settles for less, but most fail. A plan pays it all, over time.
Offer in compromise vs Payment plan at a glance
| Offer in compromise | Payment plan | |
|---|---|---|
| What you pay | Less than you owe, if accepted | The full balance plus interest |
| Cost to apply | $205 fee plus a first payment | $0 to $178 setup fee |
| Odds | About 1 in 7 accepted in FY2025 | Most people who can pay over time can get one |
| Time to an answer | Can take up to 2 years | Often right away online |
| Collection clock | Extended while it is reviewed | Paused while a request is pending |
| Liens | Not released until the offer is paid | May be withdrawn on the $25,000 direct debit path |
What to know
The IRS usually won't accept an offer if you can pay in full with a plan. So most people start by checking a plan.
An offer looks at your income, costs and equity in what you own. Use the free IRS Pre-Qualifier tool first.
Results depend on your situation. Not every case qualifies.
Offer in compromise may fit if
- You truly can't pay in full, even over years
- The Pre-Qualifier tool suggests you may be eligible
- All returns and estimated payments are current
Payment plan may fit if
- You can pay the full balance over time
- You want a quick answer
- You owe $50,000 or less and want to apply online
Results depend on your situation. Not every case qualifies.
Common questions
Can I be on a plan while my offer is reviewed?
You don't need to keep paying an existing plan on the same balance while the offer is reviewed, but you must keep making offer payments.