What Is an Offer in Compromise?

What Is an Offer in Compromise? So an offer and compromise is sort of what it sounds like you make an offer you offer the government the sum of money in order to compromise a pass tax line in making an offer a compromise and say I understand that I owe $100,000 I'll give you five grand the government takes your offer and they say do we want to accept this or not I know what you think five grand on one hundred thousand no way the government would take that well actually you'd be wrong I mean we've gotten offers and compromises accepted on multi-million dollar liabilities for like the size of the liability doesn't matter and they offer compromise context it's more about the factual situations involved here so what the government asked for in exchange for forgiving the taxpayer is they're asking for the taxpayer to be compliant in filing and paying over a period of time usually five years so there's an agreement that's being put in place and the reason the government is willing to forgive past tax liabilities is because where I'm a policy perspective it's much more valuable to get clients to get tax payers back in the fold you want people back in compliance you want them paying and and paying forward, because if you got a guy who is 100 grand he doesn't have a lot of incentive to come back in the system he's just gonna keep pulling liability so to the government it's much more valuable to stop the and to get somebody compliant going for and with that said the offer and compromise process it's a lot of variables to it, so I really encourage you to consult an attorney or somebody who's knowledgeable in how financial analysis works because there's a very high percentage of offering compromised they can reject it but the good news is if you structure them correctly you can basically get them through.


Sam Brotman, JD, LLM, MBA

Owner and Director of Legal
Brotman Law