The IRS most commonly accepts offers for the reason of doubt as
to collectibility.16 Doubt as to collectibility exists where the taxpayer is
unable to pay the full amount of the tax liability owed because “the
taxpayer’s assets and income are less than the full amount of the liability.”17
Thus, these OICs require the IRS to determine the taxpayer’s
ability to pay.18 Treasury Regulations provide that, in determining ability
to pay, taxpayers will be allowed to retain sufficient funds to pay basic living expenses.19 When calculating basic living expenses, IRS
guidelines on national and local living expense standards must be considered,
however individual facts and circumstances will also be taken
into account