Offer in Compromise

A recent Tax Court decision was reported dealing with Offer in Compromise. J. Frank Best, Tax Controversy CPA/U. S. Tax Court Litigator with locations in Raleigh and Wilmington, NC  & North Myrtle Beach and Myrtle Beach, SC works to stay current on all IRS decisions concerning tax litigation to ensure we are fully informed and prepared for clients.


IRS’s Rejection of Offer in Compromise of 4 Percent of Tax Liability Was Not an Abuse of Discretion: In Snipes v. Comm’r, T.C. Memo. 2018-184, the Tax Court held that, in view of actor Wesley Snipes failure to provide bona fide documentation to prove his assets and financial condition, as well as the disparity in an offer in compromise (OIC) he made to the IRS versus his reasonable collection potential as determined by IRS, an IRS settlement officer did not abuse her discretion by rejecting the actor’s OIC, refusing to conduct an expedited transferee investigation, or sustaining the filing of a notice of federal tax lien. The actor had made a cash OIC of $842,000, which was less than 4 percent of his total underlying liability.