Key Takeaways

• An Offer in Compromise allows eligible taxpayers to settle IRS tax debt for less than the full amount owed.
• Eligibility depends on reasonable collection potential, based on income, assets, and allowable living expenses.
• The IRS reviews three offer types: doubt as to collectability, doubt as to liability, and effective tax administration.
• Incomplete filings, inaccurate financial disclosures, or noncompliance often result in returned or rejected offers.
• Professional guidance can help align financial documentation with IRS standards and improve approval chances.