If you owe money to the IRS but are unable to pay the full amount, you may be eligible to settle your tax debt for less than you owe. It’s called an Offer in Compromise, or OIC. This is an agreement between you as the taxpayer and the IRS that settles a tax debt for less than the full amount owed.

To be considered for an OIC, generally you must make an appropriate offer based on what the IRS considers to be your true ability to pay. You can either submit an offer by yourself, or hire someone to help you.

This video provides step-by-step instructions about how to complete the forms needed to submit an Offer in Compromise with the IRS. It will help you calculate an appropriate offer based on your assets, income, expenses, and future earning potential.

Before you spend time doing the OIC paperwork, find out if you would even qualify for an OIC through your IRS Individual Online Account.

While the instructions in this video are up-to-date, your form may look different from the images shown.

Visit IRS.gov/OIC for the current form and more information.