The idea of an Offer in Compromise sounds titillating: Just complete a simple form and you can walk away from your IRS debt by paying just a portion of your back taxes, or so the urban legend goes.

Many taxpayers can be forgiven for thinking an Offer in Compromise is just that simple, because that not-entirely-truthful statement is frequently broadcast by unscrupulous companies that may be more concerned with making a quick sale than following through on their claims.

Still, an Offer in Compromise can be an appropriate solution for taxpayers who truly qualify for the program. A qualified and reputable tax professional can honestly assess if you would be a good candidate for the program and advise you of alternate solutions if you are not a good candidate for an OIC (offer in compromise.)

If you are a good candidate for an Offer in Compromise, bear in mind that the application can be both expensive and time-consuming. As of January 1, 2007, the fee to apply was $150. You will also have to also have to be prepared to send in a significant portion of your settlement offer to the IRS along with your application. The application itself is rather detailed and lengthy; you will have to provide the IRS with detailed financial information and must have the documentation to support your claims.

You may want to consider consulting a tax professional to assist you in completing the OIC application, since the IRS checks over this form very carefully, and may reject your application if it is not completed properly.