What Are the Different Types of Offers in Compromise?

What Are the Different Types of Offers in Compromise? So there's three main types of offers and compromise at the federal level there's doubt as to collectability there's doubt as to liability and there's effective tax administration so let's start with Dallas collectability data stack electability is the traditional offer or compromise that you may have heard of but settle your tax liability for pennies on the dollar and much like the name suggests the reason that you're submitting an offer of compromise is the doubt that the government will ever be able to collect that liability over the next X amount of years so from a government's perspective the government has a lot of people that owes money it's not interested in going after a lost cause so the government would rather cut its losses settle the account get you in compliance and move forward so that's essentially what the ask is and a doubt is the collectability offer compromise get a doubt as to liability offer compromise you're debating whether or not you actually owe the liability and you're making a settlement offer to the government based on a the fact that you don't owe this liability and B the risk to the government if they don't take your data to liability that they won't collect anything for will collect less than.

They offer this being game so that's a Dallas to liability an effective tax administration offer and compromise is asking the government to forgive a tax liability for a reason that doesn't fall within dynasty flexibility without the liability but it is generally a good idea so effective tax administration's offers and compromises are generally reserved for old people and generally referred reserved for sick people for those with any sort of disability, because from a public policy perspective yes an old an elderly person might have sufficient assets to pay the liability but taking away grandma's retirement fund and leaving her with nothing while she spends the rest of her days is not. The best thing from a public policy standpoint so when you get into those situations they're obviously much more difficult they're very fact-specific and they're very fluid so offers and compromises all of them are often than not less successful and the reason for that is a lot of people don't know what they're doing when they go through the offer and compromise process so it's very formulaic it's very rigid and you need an expert to kind of navigate through that process so if you're gonna do an offer and compromise and you're gonna make a good-faith effort because of the higher amount of rejection no matter what offer a compromise you Peck I'd encourage you to consult with an attorney or a knowledgeable professional to help get cheap navigate through the process.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law