The Internal Revenue Code provides statutory authority for the IRS to compromise or settle any tax liability for less than the full amount owed. This authority is discretionary on the part of the IRS, and there are no statutory rules that require acceptance of an offer in compromise under any circumstances. The IRS has to authority to reject any offer in compromise it chooses to and usually only will compromise a debt under certain circumstances.
Chance of Acceptance
It should be noted that the overall chance for having an offer in compromise application accepted varies greatly depending on various circumstances and the cycle that the IRS is in. During 2001, the IRS received over 125,000 requests for an offer in compromise and accepted 34%. In 2008, the rate dove to a level of 24%. As you can see, the IRS acceptance rate changes overtime depending on the overall economy and many other factors.
Basis for Acceptance
By regulation, the IRS is authorized to compromise a tax liability on the basis of doubt as to collectability, doubt as to liability, and to promote effective tax administration. Most of the offers are based on doubt as to collectability. This is because many debts a taxpayer carries may be so large that they will be unable to ever pay them off.
A professional who has handled many offers in compromises in the past will be able to accurately predict whether the IRS will view a debt as uncollectible or whether they will reject the offer on the grounds that the taxpayer may be able to come up with the money in the future.