You may qualify for an Offer in Compromise if you are unable to pay your taxes in full or if you are facing severe or unusual economic hardship. Refer to Tax Topic 204, Offers in Compromise, for additional information.

If you are unable to pay your delinquent taxes owed to the IRS you can settle and resolve this in many ways. An Offer In Compromise is one way to "settle" but it is rarely accepted by the IRS - so don't get your hopes up. Here are a few ways you can settle or resolve IRS taxes. 1) Setup an IRS Installment Agreement - An IRS Installment agreement will allow you to avoid any more penalties and pay your taxes over time sort of like a mortgage or a car loan. The IRS will usually accept this easily for taxpayers who owe up to $25,000. It is more of a payment plan cause you are not settling but rather paying the IRS over time. 2) Another thing you can do is submit a Partial Payment Installment Agreement Request (PPIA). This is like a regular Installment Agreement except you pay the IRS over time less than what you owe (so it is a form of settling for less). Be aware, you need to qualify for this type of relief with full financial disclosure. 3) An Offer In Compromise (OIC) is another route you can take. It will require full financial disclosure (with a collection information statement). With an OIC, the drawback is you have to send 20% of your offer at first and if the IRS rejects it you don't get the 20% back it is applied to your liabilities typically. For more detailed self-help information visit http://www.backtaxeshelp.com/tax-settlement.html