Is it really possible to pay the IRS "pennies on the dollar" and have the rest of your tax bill forgiven? Yes – it is possible...but it's not very likely. It's called an Offer-In-Compromise and it used to be the only legitimate way to negotiate an actual lowering of the amount of taxes owed to the IRS by a taxpayer...sometimes far less. However, since the IRS has seen so much "abuse" of this particular method of tax relief in recent years, they have shown by their actions that they are less and less apt to accept an Offer-In-Compromise.