Offer in compromise
The Offer in Compromise (or OIC) program, in the United States, is an Internal Revenue Service (IRS) program under 26 U.S.C. § 7122 which allows qualified individuals with an unpaid tax debt to negotiate a settled amount that is less than the total owed to clear the debt. A taxpayer uses the checklist in the Form 656, Offer in Compromise, package to determine if the taxpayer is eligible for the offer in compromise program. The objective of the OIC program is to accept a compromise when acceptance is in the best interests of both the taxpayer and the government and promotes voluntary compliance with all future payment and filing requirements.
Qualifying conditions
At least one of three conditions must be met to qualify a taxpayer for consideration of an OIC settlement:
Doubt as to Liability — Debtor can show reason for doubt that the assessed tax liability is correct
Doubt as to Collectibility — Debtor can show that the debt is likely uncollectable in full by the IRS under any circumstances