Is doubt as to liability a basis for an offer in compromise?

Doubt as to liability is a form of Offer in Compromise that comes into play when a taxpayer doesn’t actually owe the tax the IRS claims they do. The tax has been assessed to the wrong taxpayer. The IRS misplaced an amended return.

What is a doubt as to liability?

Doubt as to Liability occurs when the taxpayer feels they do not owe the debt. The taxpayer must include an explanation as to why they feel they do not owe all or part of the tax and supply any supporting documentation.

Doubt as to liability is a form of Offer in Compromise that comes into play when a taxpayer doesn’t actually owe the tax the IRS claims they do.

When to use doubt as to liability offer in compromise?

Program Goals: The government, like other creditors, encounters situations where there is a legitimate dispute as to what is owed. It is an accepted business practice to resolve these issues through negotiation and compromise. This IRM discusses Doubt as to Liability (DATL) offers in compromise.

When does a doubt as to liability exist?

Doubt as to liability exists where there is a genuine dispute as to the existence or amount of the correct tax debt under the law. These offers are different from Doubt as to Collectibility since they are not based on the ability to pay the outstanding liability.

Can a individual file an offer in compromise?

Individual taxpayers in an open bankruptcy proceeding aren’t eligible to enter into an OIC. You can use the IRS Offer in Compromise Pre-Qualifier Tool to see if you are eligible to make an offer. You can also follow the instructions in Form 656-B Booklet, Offer in Compromise , to prepare and file the offer.

When to consider liability offer in compromise ( OIC )?

This supersedes IRM 5.19.24, dated August 13, 2018. Small Business Self Employed (SB/SE) campus employees who process Doubt as to Liability Offer in Compromise cases. Purpose: During the investigation of an offer in compromise (OIC), certain situations may be encountered that require consideration before a final determination can be made.