Certain taxpayers who can’t pay their entire tax liabilities may seek an Offer in Compromise (OIC) from the IRS. An OIC agreement settles the debt for less than owed if a taxpayer can show verifiable financial hardship. One married couple that operated an education facility owed $605,597 but proposed to pay only $75,000, citing “exceptional circumstances other than economic hardship.” They asserted that as educators, they provide “an invaluable service for the community.” They stated that full payment of the tax bill would be inequitable and lead to financial hardship. The OIC was rejected because their assets were deemed sufficient to pay in full, without hardship. (TC Memo 2025-17)
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