Regardless of their new “unemployment status”, many taxpayers are under the impression that they will not qualify for an Offer in Compromise. The truth of the matter is, the IRS makes determinations based on the individual taxpayer’s ability to pay. The IRS reviews each applicant’s appreciable equity in assets with a 20% reduction in value, in addition to other standard exemption amounts. To determine an OIC amount, income and living expenses are examined. For example, those currently living paycheck to paycheck are most likely to qualify for an offer if they have no appreciable equity in assets.nnThe IRS cannot make a collection determination if you receive unemployment benefits as income because of the temporary nature surrounding unemployment benefits. In this case, the IRS does not entertain the idea of an OIC, simply because they need to see potential of income once your period of unemployment comes to a close.