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If the IRS agrees, you may be able to get an Offer in Compromise (OIC) approved to settle your debt for less than the full amount. Naturally, OICs are difficult to get approved. The IRS is known more for collecting taxes rather than forgiving taxes.
The IRS will typically only settle for what it deems you can feasibly pay. To determine this, it will take into account your assets (home, car, etc.), your income, your monthly expenses (rent, utilities, child care, etc.), your savings, and more. The average settlement on an OIC is around $5,240.
Form 9325 is a confirmation form from the IRS that the individual tax return or extension has been received through the electronic filing process and accepted by the IRS. Form 9325 is not required, but some taxpayers may request this form to prove their returns have been e-filed and accepted by the IRS.
You dont have to make payments on an existing installment agreement. Your offer is automatically accepted if the IRS doesnt make a determination within two years of the IRS receipt date (This does not include any Appeal period.)
You may also make your payment(s) through the Electronic Federal Tax Payment System (EFTPS) . Select the type of payment: Offer in Compromise - Application Fee.
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Processing times vary, but you can expect the IRS to take at least six months to decide whether to accept or reject your Offer in Compromise (OIC). The process can take much longer if you have to dispute the examiners findings or appeal their decision.
To qualify for an OIC, the taxpayer must have filed all tax returns, have received a bill for at least one tax debt included on the offer, made all required estimated tax payments for the current year, and if the taxpayer is a business owner with employees, the taxpayer must have made all required federal tax deposits
If the IRS accepts an offer in compromise, settling a tax debt takes 6 to 8 months. If the agency rejects the offer, then accepts it on appeal, the process takes 8 to 12 months.

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