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ACCEPT NO COMPROMISES

August 25, 2005

The tax law has long allowed the IRS to compromise tax liabilities when there is doubt about whether am amount owing is legitimately due, or when the taxpayer has no way to pay (the technical term for such a taxpayer is "turnip," I believe).

In 1998 Congress allowed the IRS to comrpomise tax es taking into account "factors such as equity, hardship and public policy where a compromise of an individual taxpayer’s income tax liability would promote effective tax administration."

After six years, the IRS still makes very few compromises under the 1998 changes. Thanks to the TaxProf Blog, a discussion of the IRS compromise policy written for Tax Analysts is available today to non-subscribers: The 'Effective Tax Administration' Offer in Compromise.

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