The Offer-in-Compromise is used to make an agreement with the IRS to accept a smaller amount than the accessed tax liability. This is the "pennies on the dollar" that you hear about on TV ads.
The problem with the TV ads is that they lead you to believe that the IRS accepts these low offers because some silver-tongued devil talked them into it. Nothing can be further from the truth. The IRS uses a formula approach to deciding what amounts they would be willing to accept. This formula is called the RCP for Reasonable Collection Potential and is based on the value of what you own and your future potential income.
Knowing how the RCP formula works for your situation is the key to getting the lowest offer possible accepted. This is where planning pays off.
Submitting your Offer-in-Compromise for an amount that is considerably lower than the RCP formula amount is a waste of time. The IRS is not a desperate negotiator and they have powerful tools in the form of levies and liens that they can use to get your money.