Can I settle tax debt for less than I owe if I'm retired?

Retired taxpayers often have favorable options for settling tax debt for less than full value. The IRS Offer in Compromise program considers your Reasonable Collection Potential (RCP), which for retirees is typically low because: retirement income (Social Security, pensions) is usually fixed and modest, limited future earning potential reduces the income projection, and retirement accounts like IRAs and 401(k)s may be partially protected in OIC calculations. Additionally, Currently Not Collectible (CNC) status is common for retirees because Social Security and pension income often doesn't exceed IRS-allowable living expenses. If you're over 65 and your only income is Social Security, you likely qualify for CNC status. The IRS's standard living expense allowances for taxpayers 65+ include additional amounts for healthcare. Combining CNC status with the 10-year collection statute can result in significant debt being written off. For example, if you owe $50,000 with 4 years left on the CSED and you're 70 with only Social Security income, the IRS may place you in CNC status, collect only through refund offsets, and write off the remainder when the statute expires.