Offer in Compromise Eligibility — What IRS Transcripts Reveal Before RCP Math

Key takeaways

• Tier IRS (transcripts) establishes liabilities, filing posture, exams, prior OIC, and enforcement — not RCP.
• Tier 433 (financial intake) establishes RCP — asset equity and monthly disposable income.
• Unfiled returns, open TC 420 exams, active bankruptcy (TC 520), and pending OIC (TC 694) often block or delay OIC.
• If preliminary RCP ≥ transcript balance, honest advice is often IA or full pay — not OIC.
• Brevitax ranks programs on the governed case record — it does not file OICs or guarantee acceptance.

What transcripts establish (Tier IRS)

• Assessed balances, penalties, and interest by tax year.
• Filing posture: filed TC 150, SFR (TC 971 AC 141), or unfiled with wage & income income.
• Open examination (TC 420/424) — OIC usually premature while exam is open.
• Prior or pending OIC (TC 694, TC 480, TC 780) — tolling and re-file strategy.
• Bankruptcy hold (TC 520) — blocks OIC while active.
• Collection enforcement (TC 668, TC 582) — urgency and sequencing.
• CSED timeline — investigation may run 12–24 months; tolling matters.

What transcripts do not establish

• Reasonable Collection Potential — requires Form 433-A (OIC) or 433-B (OIC).
• IRS allowable expense standards — intake and documentation.
• Penalty abatement merit — transcripts show TC 276/271, not reasonable-cause narrative.
• Client hardship story — Tier client narrative until corroborated.
• OIC Pre-Qualifier likelihood — financial inputs drive that tool.

Processability gates — check on transcript first

• All required federal returns filed (or valid extension with payments).
• Not in open bankruptcy.
• Current-year estimated tax payments made (individuals).
• Business: federal tax deposits current when applicable.
• No unresolved SFR you still intend to contest without original return plan.

Primary source: IRS OIC FAQs · IRS OIC overview

Transcript signals that often disqualify or delay OIC

• TC 420 — open exam: liability may still move.
• Unfiled modules with W-2/1099 on wage & income — compliance precedes OIC.
• SFR modules — original return and reconsideration often required first.
• Prior rejected OIC with short remaining CSED — tolling may have consumed statute.

Qualify before you quote → · Transcript codes guide → · Sample Discovery report →

More firm playbooks

Transcript resources for firms

Follow the cluster in order — records, account ledger, codes, notices, then verification.

• How to get IRS transcripts
• How to read IRS transcripts
• Account transcript explained
• Wage & income transcript
• IRS transcript codes guide
• Transaction code reference (TC deep dives)
• IRS notices explained
• Verify prior tax relief work

Common questions