Offer In Compromise

It is possible for a person to settle their debt with the IRS for less than they owe with the Offer in Compromise program.  The program allows taxpayers to settle with the IRS on tax debt for liabilities they cannot afford to pay.

The IRS Code states: "We will accept an Offer in Compromise when it is unlikely that we can collect the full amount owed and the amount you offer reasonably reflects the collection potential..." (Internal Revenue Code section 7122).

In certain cases it may be possible to completely eliminate the taxes owed - including penalties and interest.  There is no preset bottom limit that the IRS will accept to settle a tax debt.  Every Offer in Compromise is handled on a case by case basis.