Collection Actions: 10.4.3.3 Offer-in-Compromise
The IRS may accept payment for less than what a taxpayer actually owes through its “offer-in-compromise” program. Reduced payment is permitted when the IRS determines that, under established financial guidelines, the taxpayer cannot afford to pay the full amount of taxes owed or where an exceptional circumstance exists such that collection of the tax would create an economic hardship or would be unfair and inequitable (for example, the assets that could be used to pay the tax debt are needed to pay for the long-term care of a seriously ill person).