Offer in Compromise

When there is doubt as to the collectibility of federal taxes, the IRS
may consider collecting less than the full amount of the liability as
provided for by an offer in compromise. Cases involving doubt as
to collectibility are investigated by the IRS district Collection
Division. Cases involving doubt as to the liability are generally
investigated by the Examination Division except for 100 percent
penalty cases (see One Hundred Percent Penalty), which are
investigated by Collection Division. Form 656, "Offer in
Compromise," contains instructions on how to file and explains the
provisions of this procedure.

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