Doubt as to Liability. This means that doubt exists that
the assessed tax is correct. Do not use this reason if the sole basis for filing an offer
isbecause you are unable to pay the tax liability. If you do not think that you owe the
tax liability, then you may
submit an OIC for “Doubt as to Liability”(see Item 6 on Form 656). You must submit a detailed written statement
explaining why you believe you do not owe the tax that you want to
compromise.You are not required to
submit a collection information statement if you are submitting an offer on
this basis alone.
An Offer in Compromise (OIC) is an agreement between the taxpayer and the government that
settles a tax liability for payment of less than the full amount owed.The Service will generally accept an OIC
when it is unlikely that the tax liability can be collected in full and the
amount offeredreasonably reflects collection potential.
An OIC 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
Note: A “protracted installment agreement” is defined as
being one that extends beyond the period allowed under IRS issued guidelines.
The success of the Offer in 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
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
Doubt as to
Collectibility. Doubt exists that you could ever pay the full amount of tax owed. Before the IRS can consider a doubt as to collectibility offer (absent special circumstances), the taxpayer must not be able to pay the taxes in full
either by liquidating assets or through current installment agreement
guidelines. You must submit the appropriate collection information statement along with all
required supporting documents.
Administration (ETA). This means that the taxpayer does not have any doubt that the tax is correct and there is
no doubt that the full amount of tax owed
could be collected, but an exceptional circumstance exists that would allow us
to consider your offer. To be eligible for compromise on this basis, you must
demonstrate that the collection of the tax would create an economic hardship
or would be unfair and inequitable. If you are requesting an ETA offer, you must submit: