Offer In Compromise

Under an IRS Offer in Compromise (OIC), a taxpayer can settle a tax debt for less than the amount owed if certain requirements are met. In one case, a man filed an OIC and the IRS rejected it because the taxpayer’s “collection potential” was higher. The IRS included an unpaid receivable as an asset because the taxpayer had control of the entity that owed him money. After his death, his estate fought the OIC rejection. The U.S. Tax Court upheld it, stating “it was based on a reasonable application of the IRS’ published guidelines.” (TC Memo, 2017-45)