Offer in Compromise


How Offers in Compromise Work

There are three different types of offers’, the Doubt as to Collectability, the most common, the Doubt as to Liability, and the Effective Tax Administration offer.

The Doubt as to Collectability offer is a program for taxpayers that will not be able to pay their past due liability over the collection statute. The offer program has recently been revised by the IRS and several aspects of the offer calculation have changed. The offer amount is based on equity in assets and net discretionary income.

Doubt as to liability exists when there is a genuine dispute as to the existence or amount of the correct tax.

An offer may be accepted based on effective tax administration when there is no doubt that the full amount owed can be collected, but requiring payment in full would either create an economic hardship or would be unfair and inequitable because of exceptional circumstances.

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