Pending legislation may well put a stop to offers that would be submitted under the IRS' offer in compromise (OIC) program. The OIC allows a taxpayer to offer an amount to the Service in full payment of their IRS debts. Last year, the Service added an application fee to reduce the number of offers they receive, but that must not have been enough for them.
The Service would like to require a 20% nonrefundable down payment be made with any offer. It's feared that this would be a disincentive to submissions, as there's no guarantee your offer will be accepted, and taxpayers would be out their down payment. I suppose the funds would be applied to the debt already owing, but this still stands to curtail a program that has been a lifesaver for many taxpayers.
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Good news! It appears that this and some other provisions were eliminated from the bill that was signed by President Bush on August 10. The House version did not contain the OIC provision, and it appears their side must have won out in the conference committee. Now, a quick disclaimer - this is based on my interpretation of an 800+ page federal document, so we may still need to wait for details to shake out.
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