An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can’t pay your full tax liability or doing so creates a financial hardship.  The IRS will consider your unique set of facts and circumstances: Ability to pay Income Expenses Asset equity Generally, the IRS will approve an offer in compromise when the amount you offer represents the most they can expect to collect within a reasonable period of time.