OFFERS IN COMPROMISE
An Offer in Compromise (OIC) is an out of court agreement between the IRS and you that resolves your liability. The IRS has the authority to settle or compromise federal tax liabilities by accepting less than full payment.
One of the reasons the IRS will accept less than the full amount is called "Doubt as to collectibility". What this means is the income is lower than acceptable. There is not enough assets to satisfy the debt if liquidated. Many taxpayers file an OIC after receiving a discharge in bankruptcy in order to settle non-dischargeable tax debt.
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