Which is better, an Offer in Compromise or Installment Agreement?

If you qualify for an Offer In Compromise due to your current financial situation, then it is always better to do the Offer. Often we can offer the IRS a small fraction of the total amount you owe. If the Offer is accepted, then when you pay the Offer amount, the remainder of your tax debt is written off and you have a fresh start. If, for whatever reason, we cannot propose a valid Offer, then we will propose an Installment Agreement. In an Installment Agreement, the assumption is that you will pay the entire amount owed, plus penalties and interest, but it is paid over a long period of time. However, that is not always the case. I’ll explain in my next blog post.