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IRS Policy Statement P-5-100
- Offers will be accepted: The Service will accept an offer in compromise
when it is unlikely that the tax liability can be collected in full and the
amount offered reasonably reflects collection potential. An offer in
compromise is a legitimate alternative to declaring a case currently not
collectible or to a protracted installment agreement. The goal is to achieve
collection of what is potentially collectible at the earliest possible time
and at the least cost to the Government.
- In cases where an offer in compromise appears to be a viable solution to a
tax delinquency, the Service employee assigned the case will discuss the
compromise alternative with the taxpayer and, when necessary, assist in
preparing the required forms. The taxpayer will be responsible for initiating
the first specific proposal for compromise.
- The success of the compromise program will be assured only if taxpayers
make adequate compromise proposals consistent with their ability to pay and
the Service makes prompt and reasonable decisions. Taxpayers are expected to
provide reasonable documentation to verify their ability to pay. The ultimate
goal is a compromise which is in the best interest of both the taxpayer and
the Service. Acceptance of an adequate offer will also result in creating for
the taxpayer an expectation of and a fresh start toward compliance with all
future filing and payment requirements
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