If using national standards shows that a taxpayer’s monthly disposable income (“MDI”) is zero, can an offer in compromise be submitted if the offer is made using money gifted from family and friends?

Yes and no. Yes the taxpayer can obtain the funds from family or friends. When we submit an offer, we usually state that the money being used to pay the offer was borrowed from family friends, and not gifted. This information is entered in the section on the form where the IRS asks for the source of funds.

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