Yes, certain employers who cannot pay their employment taxes may be able to settle their tax debt with the IRS for less than the full amount they owe. To apply, employers must submit Form 656, Offer in Compromise (OIC), and supporting documents proving their eligibility.
The IRS will usually make a decision based on an applicant’s income, expenses, asset income, and ability to pay. The IRS will typically turn down an OIC offer if a business can pay the full amount through an installment agreement.