A compromise is an agreement to accept less than the total amount owing in principal, interest, and administrative costs in civil cases. Compromises are accepted only when it is not in the best interest of the government to pursue the full amount of the debt. Pursuant to Title 31, Code of Federal Regulations (C.F.R.), Section 902.2, the factors to consider include: (1) the debtor’s inability to pay the full amount within a reasonable time; (2) the government’s inability to collect the debt in full within a reasonable time by enforced collection proceedings; (3) the cost of collecting the debt does not justify the enforced collection of the full amount; or (4) there is significant doubt concerning the Government’s ability to prove its case in court.

Pursuant to 28 C.F.R., Ch 1, Part -0, Subpart Y, App. Civil Division Directive1-15, compromises must be approved by an Assistant United States Attorney who supervises other Assistant United States Attorneys who handle civil litigation.

A claim or judgment should only be compromised with agency approval. Whenever a claim is compromised, the full compromised debt should be collected in a lump sum within 180 days. If the compromise is not paid in full within 180 days, the government’s claim must be secured by the entry of a judgment.

[added May 2018]