Tax Relief: IRS Taking Forever to Accept your Offer in Compromise?
Posted by LWM Team on Thu, Jan 07, 2010
Normally the IRS is quick in processing an offer in compromise, but it is possible for documents to be lost and for claims and enquiries to not be processed. Your Offer in Compromise claim could have been lost if you find you've been waiting for a little too long to hear back from the IRS. But this is nothing to worry about. In fact, waiting for a long time and hearing nothing could be a good thing and could be of benefit to you.
How much time is needed for your Offer in Compromise claim not being responded to for a benefit to come out of it? Well, by law, if the IRS does not response to your claim within two years of when you file it, it is automatically accepted, regardless of how much it was for. The IRS code section 7122 part (f) covers this and states that if, after a 24 month period, an offer in compromise has not been rejected, it will be automatically approved.
The IRS will class your offer in compromise as having had a decision made on it through a few ways. If it was returned and deemed "unprocessable", it is rejected, it is withdrawn (by you) or if you don't make payments while it is pending (and, of course, if it is accepted). If you appeal a rejection, this is not classed as within the 24 month time limit since a rejection is classified as a decision.
It is advisable that you make sure to keep records of when you originally filed the claim should the IRS take a long time in making a decision. The ‘normal' time for the IRS getting back to you about your claim is six to nine months, but if you find yourself waiting for longer, it could be advantageous if you simply just wait.