Updated

The number of 'offer in compromise' agreements approved by the IRS, which allow taxpayers to settle debts for less than the full amount owed, has fallen sharply since 2023 even as applications have risen. Taxpayer advocates say they have rarely seen such a low approval rate, and tax experts are uncertain what is driving the decline. The drop raises concerns for financially distressed taxpayers seeking relief through the program, and has prompted calls for the IRS to clarify its criteria for accepting settlement offers. The issue adds to broader scrutiny of IRS operations and taxpayer services.