The Offer in Compromise based on Effective Tax Administration is available only if the taxpayer has the means to pay the tax in full but, due to public policy considerations, he is allowed to satisfy the debt in full by paying a small percentage of the total. The other requirement for this type of Offer is that paying the tax in full will cause the taxpayer a severe economic hardship. The Internal Revenue Manual defines an economic hardship as “an inability to meet reasonable basic living expenses.” Certain circumstances, such as long term illness or disability that causes a taxpayer to be incapable of earning a living, also constitute an economic hardship. However, the IRS remains very reluctant to find any situation to be enough of an economic hardship to grant relief based on this type Offer. The position of the IRS now is that a “Compromise will be justified only where, due to exceptional circumstances, collection of the full liability would undermine public confidence that the tax laws are being administered in a fair and equitable manner.