An Offer in Compromise is, for all intents, a covenant with the Internal Revenue Service or other relevant tax agency.

If it can be determined that a taxpayer cannot possibly pay what is owed in a reasonable amount of time (typically five years), the taxpayer can attempt to prove this and offer what can be reasonably collected in that period; in turn, however, they must file all of their taxes on time with no extensions for the next five subsequent tax years.