Offer in Compromise

(redirected from Offers in Compromise)

Offer in Compromise

A program whereby a person or company owing delinquent taxes asks the IRS to settle the debt for less than the full amount owed. In order to be eligible for an offer in compromise, the taxpayer must demonstrate some doubt that the assessed amount owed is correct, show some evidence that he/she will never be able to pay in full, and/or show that there are other circumstances, such as age or disability, that will hinder payment. See also: Form 433-A.
References in periodicals archive ?
"Offers in Compromise mutually benefit the taxpayer and the IRS.
To find out more about Offers in Compromise, go to the IRS Website at www.irs.gov and search Publications 594 and 656, speak with a tax professional or certified public accountant, and read Stand Up to the IRS.
In the past, only a relatively small number of Offers in Compromise have been accepted.
According to the Research Institute of America, the IRS has said it expects to issue a new Internal Revenue Manual section on offers in compromise to resolve two areas of frequent difficulty: how much the taxpayer needs for "necessary living expenses" and how the taxpayer's assets should be valued on form 433-A.
At present, the Government's authority to enter into offers in compromise is contained in Sec.
As a result of changes made to the offers in compromise program in 1992, the number of offers and acceptances has increased greatly.
The message behind the guidelines is very simple--accept more offers in compromise.
She noted, for instance, that revenue officers often are reluctant to consider offers in compromise (agreements between taxpayers and the IRS to pay less than the required amounts in full satisfaction of their liabilities) or are afraid to make decisions.
Recently, the IRS made significant changes in its procedures for offers in compromise of a tax debt.
According to internal revenue news release IR-93-45, the number of taxpayers with installment agreements and accepted offers in compromise increased more than 30% in the last year.
This settlement procedure has been conducted under the strict guidelines of the IRS's offers in compromise (OIC) policy.
* Acceptance of offers in compromise is encouraged.