What is Legal Terms - Taxpayer's Offer in Compromise?

Taxpayer's Offer in Compromise Information: In tax law, an Offer in Compromise is a good faith proposal made by a taxpayer that is allegedly in arrears to the IRS. The proposal is made directly to the IRS and is an effort to dispose of an unpaid tax liability, including penalty and interest. If the Offer in Compromise is rejected, the taxpayer may appeal the rejection. If the proposal is agreed to by the IRS, a contract results. While the contract is in force, the IRS cannot levy on the taxpayer's property.