IRS OFFERS IN COMPROMISE

The Internal Revenue Service has statutory authority to compromise tax liability where there is doubt as to liability or collectibility or when it is indicated for the “effective administration of the revenue”.  The IRS attitude toward compromises based upon collectibility has changed dramatically from time to time.  When I worked for the IRS in the 1970s there were almost no IRS offers in compromise accepted based upon doubt as to collectibility.  Ten years ago the IRS solicited offers in compromise based upon collectibility and it soon became flooded with offers, many of which were frivolous.  In response to that several years ago the IRS closed its window on offers and it now rarely accepts an offer.  Don’t count on an offer in compromise being the solution to your problem, and don’t believe the ads that say time is running out for the “pennies on the dollar” settlement.



Kemble White, Attorney

Practice Limited to Tax Controversy Matters