Yes, if your circumstances fit. The IRS has the authority to cancel all or part of your tax debt and reach an agreement with you for less than you owe. This is called a compromise offer or OCI. A transaction offer is an agreement between a taxpayer and the IRS that settles a tax debt for less than the total amount owed.
A transaction offer is an option when a taxpayer cannot fully pay their tax liability. It is also an option when paying the full tax bill would cause financial difficulties for the taxpayer. The goal is to achieve a commitment that meets the best interests of both the taxpayer and the agency. Generally, the IRS will only settle for what it deems feasible to pay.
To determine this, you will consider your assets (home, car, etc.) The IRS will sometimes consider an agreement that allows you to pay a reduced amount of what you owe in back taxes, which is called a transaction offer. You must convince the IRS that you cannot pay what you owe and offer to pay the reduced amount in a lump sum or in short-term installments. The Offer in Compromise program is a powerful tax relief program designed by the IRS to reduce the tax liability of entrepreneurs or individual taxpayers who fight against them.
