An Offer in Compromise is an agreement between a taxpayer and the IRS that resolves the taxpayer's liability. The IRS is required by Congress to settle or compromise federal tax liabilities by accepting less than full payment if certain conditions are met. The compromise process is available to provide taxpayers with a fresh start toward future compliance with tax laws. Submitting an Offer in Compromise is a formal and complicated process. You cannot simply call the IRS and offer a certain amount of money. In-depth financial disclosures through a formal process must be made to the IRS. The final decision as to whether an Offer in Compromise is accepted rests with the IRS but, if accepted, the tax debt for the years the offer is submitted is effectively settled.