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AI IRS offer in compromise request letter

Owe the IRS and cannot pay in full? Pick your situation, enter the balance from your notice and the offer amount you propose, and get a formal request letter plus a proposed offer payment schedule computed from your own figures, ready to send with Form 656.

Tailored to your situation Draft autosaved on this device Printable letter and payment schedule General information only, not tax advice

1Pick your situationLump-sum offer, periodic-payment offer, after a collection notice, or a revised offer after a rejection.

2Enter your figuresBalance from your notice, tax years, and the offer amount you propose. Takes 3 minutes.

3Get letter + scheduleA formal request letter and a proposed offer payment schedule, ready to print.

Your request

Draft saved

What kind of offer are you proposing?

Letter strength0%

Add the key facts to unlock a strong letter.

Tax years owed

Total balance owed ($)

Proposed offer amount ($)

Proposed term (6–24 months, periodic offers only) Periodic-payment offers must be paid in 6–24 months under Form 656.

Your name

Notice or account reference (optional)

Why you cannot pay in full, in your own words

Supporting facts (optional)

Shortcut Ctrl+Enter · Autosaves as you type

Not tax advice. This tool drafts a formal letter from your own facts. It is not a tax professional, and it does not decide whether the IRS will accept your offer. Your prompt is sent to our AI service to generate the letter; nothing is filed for you. Use the figures from your own IRS notice, and confirm the process with a tax professional or the IRS before you send anything.

Your offer, as arithmetic on your figures

Enter the total balance and the proposed offer amount to see the offer as a percentage of the balance. Add a term in months for a periodic-payment offer to see the monthly figure too.

These figures are arithmetic on the numbers you enter only: offer divided by balance, and, when a term in months is entered, offer divided by months. They are not an eligibility result, not a recommendation, and not a prediction of what the IRS will accept. The final payment is adjusted for rounding so a periodic schedule totals exactly your offer amount. Interest and penalties are not included in this panel; they continue to accrue on the unpaid balance until it is paid.

Your request letter

Your request letter will appear here.

1. Pick your situation
2. Enter your figures
3. Hit Generate

Filing checklist

Do these the day you file. Tap items as you finish them; progress saves on this device.

File every required tax return before you make the offer. An unfiled return blocks review.
Copy the balance, tax years, and notice reference exactly from your IRS notice. Do not guess the figures.
Send the letter with Form 656 if you apply by mail, following the instructions on the form itself. Keep a copy of everything you send.
Propose an offer you can actually pay on the terms you state. A lump-sum offer and a periodic-payment offer are different commitments; state which one you are making.
Stay current on everything new: file on time and pay new balances, or the offer review can be affected.
If anything about your finances changes while the offer is under review, tell the IRS rather than letting the letter go stale.

Printable letter + offer payment schedule

Build a clean, one-document version of your letter and proposed offer payment schedule, then print it or save it as a PDF for your records.

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How IRS offer in compromise requests actually work

An offer is a proposal, not a promise

You propose an amount to settle the balance; the IRS reviews it and either accepts it, asks for different terms, or asks for more information. A letter that states the balance, the tax years, the offer amount, and the reason full payment is not possible gives the reviewer something concrete to consider. A vague request gives them a reason to ask again.

File first, then ask

Every required return must be filed before an offer can be reviewed. File on time even when you cannot pay in full: filing late adds a separate problem to the one you are already solving.

Lump-sum and periodic offers are different commitments

A lump-sum offer proposes paying the offered amount in one payment. A periodic-payment offer proposes paying it over a term of months. State which one you are making, and make sure the terms you state are terms you can actually meet. The panel above shows the monthly figure for a periodic offer from your own numbers only.

The offer amount must survive contact with your budget

The figure that can be paid is the one your finances actually support. State the reason full payment is not possible in plain facts: income, essential expenses, and what changed. Do not propose an amount you cannot pay on the terms you state.

A revised offer starts from the rejection, not from scratch

If an earlier offer was rejected, the revised letter should address what the rejection said, what has changed since, and what is different about the new offer. Ignoring the rejection and resending the same figures reads as a repeat, not a revision.

Everything in writing, everything kept

The notice, your offer letter, Form 656, payment confirmations, and every IRS reply, in one file. If the offer is ever questioned, the file is what decides it. Keep it until the balance is resolved and the IRS confirms it.

Common questions

What is an IRS offer in compromise?

An offer in compromise is a proposal to settle a tax balance for less than the full amount owed, when the taxpayer cannot pay in full. You propose an amount, the IRS reviews your finances and the facts, and it either accepts the offer, asks for different terms, or rejects it. It is a request, not a guarantee: nothing in this tool decides whether an offer will be accepted.

How do I make an offer in compromise?

File every required tax return first, then submit the offer with Form 656, the offer form, following the instructions on the form itself. A written request letter like the one this tool drafts goes with the form and states the balance, the tax years, the amount you propose, and the reason full payment is not possible.

What is Form 656?

Form 656 is the IRS form used to make an offer in compromise. This tool drafts the cover letter that accompanies it; it does not replace the form itself. Follow the instructions printed on the form for what to include and where to send it.

What is the difference between a lump-sum offer and a periodic-payment offer?

A lump-sum offer proposes paying the offered amount in one payment. A periodic-payment offer proposes paying the offered amount over a term of months. They are different commitments: state which one you are making in the letter, and make sure the terms you state are terms you can actually meet. This tool shows the monthly figure for a periodic offer computed from your own offer amount and term only.

What amount should I offer?

Offer an amount you can actually pay on the terms you state, based on your own finances. This tool shows your offer as a percentage of your balance, computed from your own figures, so you can see what you are proposing. It does not recommend an amount and does not predict what the IRS will accept. Propose only what you can pay.

What happens after I send an offer in compromise?

The IRS reviews the offer, which takes time. It may accept it, ask for more information or different terms, or reject it. While the offer is under review, stay current on new tax filings and new balances, and tell the IRS if your finances change. A rejection is not the end: you can revise the offer and address what the rejection said.

Can I revise an offer after it is rejected?

Yes. A revised offer should address what the rejection said, state what has changed since the earlier offer, and explain what is different about the new figures. Resending the same figures without addressing the rejection reads as a repeat, not a revision. Use the revised-offer mode in the tool above for this case.

Can I make an offer if I owe for more than one tax year?

Yes. List every tax year and the balance for each in your request, and propose one offer covering the combined balance. Enter the total balance you owe across all years in the tool above.