Dear Harry:

A couple of years ago, our son was found guilty of drug possession and was sent to prison. He had been troubled for a number of years, and he thought drugs solved his problems. He has been clean while in prison, even though he has told us that drugs are available virtually all the time. We hope that he'll be OK when his term is up. He got into trouble with his taxes back in 2005 when his employer treated him as an "independent contractor" rather than as an employee, and his drug bills used up his money. He wound up owing Uncle Sam about $3,000. Obviously, he has no money to pay the bill while he's incarcerated (it's now about $5,000), but he wants to do the right thing. We are both retired and living on a rather low fixed income. We can provide him with a place to live, but very little else. What is the best way to arrange to settle this tax debt without getting any future employer involved? He'll have enough trouble getting and holding a job with his record without the added burden of having IRS garnish his wages.

What Harry says: IRS has a program that fits his situation and could get him out of the tax debt. It's called Offer in Compromise. There are three reasons that they will accept less than the full tax due: Doubt as to the liability, doubt as to collectibility and exceptional circumstances in which the collection would not be equitable and would cause dire economic hardship. The last two would be your son's reasons for making the offer. The form (656) is pretty straightforward, and the instructions are clear. He will also have to file a backup form (433-A) regarding his financial status. There is a fee of $150, which will be waived in his case. The forms must be accompanied by a payment of 20 percent of the amount offered. Since he is probably penniless, I would hope that you can lend him the money needed to make the offer. I suggest that he offer $100 with an initial check for $20. I must tell you that IRS accepts very few offers, but I'm confident of his chances at being successful. I hope he's able to get a decent job and stay clean. *

Write Harry Gross c/o the Daily News, Box 7788, Philadelphia, PA 19101. Harry urges all his readers to give blood - contact the American Red Cross at 800-GIVE LIFE.