If you’re struggling with tax debt, an Offer in Compromise (OIC) may sound like the fastest way to get relief. But one of the most common questions people ask is: how long does an OIC take?
The answer depends on your situation, but the process is rarely quick. Most cases take 6 to 12 months, with some stretching closer to two years.
Typical Timeline for an Offer in Compromise
The IRS uses an extensive review process before deciding whether to accept your offer. Here’s what the general timeline looks like:
- Initial Processing (1–2 months)
Once you file Form 656 with your supporting financial documents, the IRS checks if your application is “processable.” They’ll confirm that your tax returns are filed and that your initial payment and application fee are included. If anything is missing, your offer may be returned without review. - Case Assignment & Review (3–6 months)
A specialist evaluates your income, expenses, and assets to calculate your Reasonable Collection Potential (RCP). They may request additional documentation or clarification. How quickly you respond to requests makes a big difference here. - Determination (2–4 months)
The IRS decides whether to accept, reject, or counter your offer. If your finances are complex, this phase can drag out. If they reject your offer, you have 30 days to appeal.
Factors That Can Extend the Timeline
Several issues can push your case beyond the “average” 6–12 months:
- Unfiled tax returns. The IRS won’t process an OIC until all prior returns are current.
- Complex finances. Business ownership, rental properties, or unusual assets may require extra analysis.
- Delays in responding. If you take weeks to send requested documents, the IRS clock doesn’t stop.
- Appeals. Disputing a rejection adds months to the process.
- IRS workload. Backlogs or staffing shortages can slow every stage.
The IRS itself cautions that an OIC review can take up to 3 years in some cases.
Setting Realistic Expectations
Competitors often quote a simple “6–12 months” timeline. While that’s true for many, it’s not the whole story. At American Tax Service, we believe in setting realistic expectations:
- Best-case scenario: ~6–9 months.
- Average case: ~7–12 months.
- Complex or delayed cases: up to 24 months – 3 years..
By breaking down each stage, we help clients understand where they are in the process, and what they can do to keep it moving.
Connecting the Series
This article follows our post on how much to offer in an Offer In Compromise, which explained the formula behind a strong offer.
Now that you know what to expect for timing, our next blog will address another concern: is canceled debt from an Offer In Compromise taxable income?
Final Thoughts on the OIC Process Length
An OIC can be worth the wait, but it requires patience, documentation, and responsiveness. The sooner you gather accurate records and reply to IRS requests, the faster the process moves.
So, how long does an offer in compromise take?
Most applications fall within the 6–12 month window, though complex cases may run longer. Acting quickly, submitting complete documents, and staying in contact with the IRS improves your odds of a faster result.
