Tax Debt Solutions Blog

Offer in Compromise- Rejected

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Awaiting the IRS’ Answer

If your offer requires corrections the IRS will return it.  You correct it and refile.  It’s not unusual.

It takes four to eighteen months for a valid offer to be scrutinized prior to a decision.  You must keep making payments according to the current installment agreement.  Only permission from the IRS can stop such payments.  You must file a tax return on time or file an extension and pay the taxes outstanding.  If you don’t, the IRS can refuse an OIC.  An acceptance is automatic if the IRS doesn’t contact you within twenty four months.

If Offer Is Initially Rejected- Keep Trying!

When an offer is refused, the IRS must give an explanation in writing.  An Offer in Compromise can be refused due to:

• An offer being too low
• Insufficient information

If the amount is too low, the written explanation must tell you what amount is satisfactory.  You must be provided with a copy of the list of features responsible for the refusal.  This is your right according to the Freedom Information Act.

When you know the reason for refusal you must write a letter with a fresh offer that differs from the first.  Your financial situation must be more or less the same.  Affirm that your reason for a change of offer is to increase the amount.  If your offer differs significantly from the first offer then complete a new Form 656.  The IRS will assist you in making a more suitable offer.

In order to help you, it is permissible for you to call the IRS at 800-829-1040 to view Offers in Compromise that were accepted within the last year.  These offers are a matter of public record for a full year; private details are not made public.  You must go to an IRS office to see such documents.  Doing this, will provide you with a better idea of what an offer should contain to be deemed acceptable by the IRS.