What is an Offer in Compromise?

In order to understand what an Offer is Compromise is, it is important to take a step back to understand the basics. The general rule is that the IRS has 10 years to collect on tax debts. This clock can be delayed or put on pause by certain actions, but generally it will start whenever the particular return is filed, or when the IRS has filed it for you. So the basis of an Offer in Compromise is to provide an option for taxpayers that will not be able to pay off their entire debt before the collection clock expires. If a taxpayer can submit financials and prove that they are unable to pay the full amount before that time expires, then the IRS is generally willing to work towards a compromise, meaning that you pay what you can afford and the IRS gets paid something instead of nothing.