If you owe federal tax and want to settle it for less than the full amount, use the IRS Offer in Compromise (OIC) Pre-Qualifier or check your Individual Online Account. Neither route guarantees acceptance: the online result is preliminary, and the IRS decides after reviewing your application and circumstances. An OIC is a way to resolve tax debt you owe—not a compensation payment or general settlement check you can claim.
First, identify which kind of “IRS settlement” you mean
The phrase can describe two different situations. An Offer in Compromise is an agreement that may let an eligible taxpayer resolve their own tax debt for less than the full amount. It does not pay compensation to the taxpayer. The IRS describes other ways to address tax debt as well, including payment, payment plans, and temporary collection delay. Which option makes sense depends on whether you can pay in full, your cash flow and timeframe, and your financial circumstances. IRS: Get help with tax debt
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If you are asking about money you may receive from a lawsuit or other settlement, that is a separate question. The sources cited here do not identify a general IRS compensation program or claimant deadline matching that description.
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File any missing tax returns
Get required filing up to date before exploring resolution options. The IRS identifies filing missing returns as the first step toward resolving a tax debt and says it can make more options available. IRS: Get help with tax debt
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Use an official IRS screening route
For an initial check, use the Offer in Compromise Pre-Qualifier. The IRS also says individuals can check through an Individual Online Account. The Pre-Qualifier asks for filing and financial information and provides preliminary guidance; the IRS cautions that it should be used only as a guide.
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Consider the financial factors
The IRS evaluates the facts and circumstances of each case. Its May 2026 tax tip identifies income, expenses, asset equity, and ability to pay among the factors. A tool result is not an approval; the IRS makes its decision after it reviews the application and the taxpayer’s circumstances. IRS Tax Tip, May 14, 2026: What to know about Offers in Compromise
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Review the current filing requirements
The IRS’s May 14, 2026 tax tip stated that an application required a $205 fee and an initial payment, with both waived for qualifying low-income taxpayers. These are dated requirements and may change. Check the current IRS forms and instructions before submitting an application; do not rely on an older fee or payment figure.
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If you meant compensation from a lawsuit
An OIC does not let you claim money from the IRS. For a lawsuit or other settlement payment, tax treatment generally depends on what the payment was intended to replace and the facts of the case. IRS Publication 525 says compensatory damages for personal physical injury or sickness are generally excluded from income, while many other categories—including punitive damages and lost wages in most cases—are generally taxable. The settlement agreement, the claim, and how the payment is allocated matter. IRS Publication 525 and IRS: Tax implications of settlements and judgments
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You can contact the IRS using the number on an IRS notice, the contact information on IRS.gov, or an IRS Taxpayer Assistance Center. Your Individual Online Account can show account balance and transcript information.
Be wary of companies that pressure you or promise to settle tax debts for “pennies-on-the-dollar.” The IRS warns about these pitches. You can apply directly if eligible, and a paid service cannot guarantee that the IRS will accept an offer. Verify a tax professional’s credentials before sharing sensitive information or paying for assistance. IRS: Recognize tax scams and fraud
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