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will be responsible for initiating the first specific
proposal for compromise.
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. Taxpay-
ers 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 the
taxpayer and the government. Acceptance of an adequate
offer will also result in creating for the taxpayer an
expectation of a fresh start toward compliance with all
future filing and payment requirements.
(2) Offers will not be accepted if it is believed
that the liability can be paid in full as a lump sum or
through installment payments extending through the
remaining statutory period for collection (CSED),
unless special circumstances exist. See IRM 5.14,
Installment Agreements.
(3) Absent special circumstances, a Doubt as to
Collectibility (DATC) offer amount must equal or exceed
a taxpayers [sic] reasonable collection potential (RCP)
in order to be considered for acceptance. The excep-
tion is that if special circumstances[10] exist as de
10The special circumstances referred to in part 5.8.1.1.3 of
the IRM and sec. 4.02(2) of Revenue Procedure 2003-71 (discussed
below) are
(1) circumstances demonstrating that the taxpayer would
suffer economic hardship if the IRS were to collect
from him an amount equal to the reasonable collection
potential of the case or (2) if no demonstration of
such suffering can be made, circumstances justifying
acceptance of an amount less than the reasonable col-
lection potential of the case based on public policy or
equity considerations. IRM pt. 5.8.4.3.4 (Sept. 1,
2005) (Effective Tax Administration and Doubt as to
Collectibility with Special Circumstances). To demon-
strate that compelling public policy or equity consid-
erations justify a compromise, the taxpayer must be
able to demonstrate that, due to exceptional circum-
stances, collection of the full liability would under-
(continued...)
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Last modified: November 10, 2007