Tax Debt Solutions Blog

How To Appeal a Rejected Offer in Compromise

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Appealing a Rejected OIC

There are two routes to take if your Offer in Compromise is refused:

1. Call the IRS officer who signed the rejection letter or you can make an appeal. 
2. A formal appeal is handled by a different division than the one that refused your offer.

A formal appeal is your last resort.  You don’t have the right to take the IRS to court for a rejection of your Offer in Compromise.  You start the process with a letter formatted by the IRS.  Your appeal must be received by the IRS within thirty days of the rejection date.  The submission of a new offer earlier than six months from the initial rejection date, without notable changes in your financial situation or without a significant hike in your offer, will not be appreciated by the IRS.

If you want the IRS to take your appeal seriously you must do the following:

• Provide all information asked for by the IRS throughout the processing of your offer.
• All previous tax returns have been filed.
• The present year’s payments and filings are up-to-date.
• Self-employed individuals have completed quarterly anticipated tax payments.
• Employers must be up-to-date with payroll tax filings as well as deposits for the present time and two previous quarters.

An appeal does postpone collection.  However, the accrual of interest carries on if a deal isn’t reached.