As a general rule, the Tax Division does not require a taxpayer to use a standard form to make a settlement offer. Ordinarily, it is sufficient if: 1) the taxpayer submits a written offer that the taxpayer or taxpayer’s counsel of record has signed; 2) the offer is definite and unambiguous; and 3) the offer sets forth clearly the proposed basis of compromise. A letter from the United States Attorney setting forth the terms of the taxpayer’s offer will not suffice unless the taxpayer or the taxpayer’s counsel signs the letter and specifically acknowledges, in writing, that the terms set forth in the letter constitute the taxpayer’s offer.

Because the IRS may assert offsets under 26 U.S.C. § 6402, the Tax Division generally will not accept an offer that calls for a refund of a specific dollar amount. Instead, in refund cases, the offer should be phrased as scheduling an “overpayment” of tax or of previously paid interest, calculated in accordance with the terms of the offer. For the same reason, the offer should provide for “interest as provided by law” instead of specifying either an amount or the dates from which the interest is to be computed. The offer should state clearly whether interest is due from the taxpayer or from the Government.

[updated April 2018]