According to legend, it started with the boxer: Joe Louis -- who, like most boxers, won lots of prize money in spurts, andwho became dramatically delinquent on his back taxes, back in his day (the '30's and onward). In sympathy to Mr. Louis (one of the most popular figures of his day), the IRS decided to come up with a plan for him to settle his taxes.
We understand that in the 70's -- the Offer in Compromise program was officially made a part of law. The IRS restructuring (in the 80's) also gave it some further clarity.
As far as our culture goes, we would say it has been television advertising -- particularly American Tax Relief in the last decade (now deceased, shut down by the FTC) -- that has made the Offer program a part of the American consciousness. Commercials commonly had actors on construction sites, taking their hard hats off to shrug off their huge tax debt, while the dollar signs flashed across the screen. Promises were made, such as "You can reduce your debt by 95%, 90% of what you owe!"
In the last decade, the Offer was significantly changed, mandating that 20% of Offers be paid up front. Furthermore, a $186 filing fee was put in place - to pay for staff and to discourage frivolous filing of Offers.
In May of 2012 - the IRS rules for Offer in Compromise changed more dramatically than they have in their history: Offer in Compromise Rule Changes - 2012 - Huge !
From our perspective of the 250 to 300 clients I help every year, about 85 cases are for Offer in Compromise.
Call us at 1-888-282-4697 to see if you are a candidate for this program. Also here are more articles about the Offer in Compromise here -- Offer in Compromise -- Issues and Angles. Staff of watax.com