Partial Pay Installment Agreement (PPIA) vs. an Offer in Compromise (OIC)
I get this question a lot from our Founder’s Mastermind members. When is a PPIA a better option than an offer in compromise?
Tax resolution pros know that navigating IRS settlement options isn’t one-size-fits-all. While many clients dream of an Offer in Compromise (OIC) to "settle for pennies on the dollar," it's not always the best—or even a viable—solution.
Sometimes, a Partial Pay Installment Agreement (PPIA) is a much smarter move for both the client and their financial reality. Here’s some examples of when to consider recommending a PPIA over an OIC:
1. The Client Has Significant Equity In Non-Liquid Assets
If the client owns substantial assets like equity in a home or other property. This equity must be part of the offered amount in an OIC regardless of whether the client can access the cash. Additionally, sometimes the amount of equity is more than the IRS liability itself, causing the OIC to be rejected.
In a PPIA the focus is on the client’s monthly cash flow rather than assets, especially if the case is with ACS, making it a much better settlement option for someone who’s "asset-rich but cash-poor."
2. The IRS Collection Statute Expiration Date (CSED) Is Approaching
If the client’s tax debt is nearing the 10-year statute of limitations on collections, a PPIA can significantly reduce the total amount they pay. By making minimal monthly payments until the debt expires, clients can avoid over-committing under an OIC, which typically requires more money to settle.
3. Some Additional Insights
I recommend your fees for a PPIA and an OIC are identical. Most practitioners sell themselves short when quoting fees for cases that involve PPIAs, simply because they don’t realize the monetary value they are providing to the client.
The work itself is about the same, however, you may be able to get a much lower settlement under a PPIA than an OIC, therefore a PPIA has as much, if not more, value to the client than an OIC.
As a tax resolution expert, guiding clients to the best solution isn’t about what sounds flashy—it’s about what works for their unique financial reality.
A PPIA can be a powerful tool in your arsenal when an OIC isn’t the right fit. Educate your clients, advocate for their best interests, and remember success is about strategy, not shortcuts!
The Roz Strategies Founder’s Mastermind program is the only program in the country that teaches you how to build a lucrative tax resolution business, in addition to providing up-to-the-minute technical training.
