The offer in compromise is a special avenue presented by the IRS that allows you to pay a part of your delinquent taxes, and be forgiven for the rest.
The OIC is a real thing, and it has helped many thousands of besieged taxpayers to get right with the IRS. In recent years the IRS has made the OIC easier to do. Why is the government willing to take a fraction of what they are owed? Among the possible reasons is that an alternative is that you might file for bankruptcy, and they might get even less.
OICs are not a slam dunk
This sounds great, but a successful offer is still a tricky matter. Fewer than half of all offers are accepted. Typical tax reductions are in the 30 to 40 percent range.
There are situations in which you might be better off declaring Chapter 7 or Chapter 13. In any event, you are much more likely to succeed if you work with a lawyer familiar with the IRS' many requirements.
The IRS will look at your financial status and decide what your "reasonable collection potential" is. They will likely reject your offer if they believe you can pay the liability, either by writing a single check or through a payment schedule.
While the offer is on the table, the IRS will not seek payment by levying your bank accounts or seizing your assets.
There are too many fine points to making a successful offer in compromise to include in this space. A skilled attorney can explain the particulars in your case.