What is a Doubt as to Liability offer?

A Doubt-as-to-Liability Offer (or \”DATL\”) is an Offer-in-Compromise based on the fact the taxpayer can prove they do not owe the money the IRS thinks they owe. A DATL does not require any financial disclosures by the taxpayer, as the Offer is not about an ability to pay. Instead, the taxpayer must submit the supporting documentation to show that they do not owe the balance the IRS believes is due.
The DATL is filed with the IRS on Form 656-L, and the documentation that supports the Offer must be included in the package.
The DATL, being an Offer, will stop any collection activity while the DATL is reviewed. But, because the DATL is an Offer, the taxpayer must offer some amount of money to settle the debt: a taxpayer cannot Offer zero. The taxpayer should offer the amount they believe the correct liability to be, and if that amount is zero then they should Offer a token amount, like $1.
It is not possible to obtain refunds through a DATL.