The Internal Revenue Service Restructuring and Reform Act of 1998 requires the Secretary to grant an installment agreement, at the taxpayer’s option, if:
• the liability is $10,000, or less (excluding penalties and interest);
• within the previous 5 years, the taxpayer has not failed to file or to pay, nor entered an installment agreement under this provision; [Act § 3467; IRC § 6159)
The IRS recently issued new guidance on Offers in Compromise (OIC), continuing a trend of liberalizing rules for compromise of outstanding tax obligations. The new rules allow more discounts of asset values and in turn leads to the ability to compromise a liability for less than in the past. The IRS last made significant changes to its offer program in 2012 and that has resulted in a dramatic increase in the acceptance rate.