An offer-in-compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that resolves tax liabilities for less than the full amount of the tax debt. The IRS may accept an Offer in Compromise Settlement based on three grounds:
- Doubt as to Liability;
- Doubt as to Collectibility; and
- Effective Tax Administration.
While the average time the IRS works on an offer-in-compromise is between ten to twenty hours, the average offer-in-compromise settlement takes a minimum of between 6-9 months to accomplish. The average offer-in-compromise settlement is 14 cents on a dollar and 38% of all offers in compromise are accepted by the IRS. All accepted OIC settlements are public records.
When the IRS rejects an OIC, it will notify the taxpayer by mail and explain the reason that it rejected the offer along with detailed instructions on how the decision may be appealed. Taxpayers have 30 days from the date of a rejection letter to appeal a decision rendered about an offer-in-compromise.
The IRS may return the OIC to a taxpayer rather than reject it when a taxpayer has not submitted the necessary information, filed for bankruptcy, failed to include a required application fee or nonrefundable payment with the offer, or failed to file tax returns or pay current tax liabilities while the offer is under consideration. As one would expect, there is no right to appeal the IRS’s decision to return an offer.
Of course, the IRS may negotiate a different offer amount and terms than those proffered by a taxpayer, when appropriate. The investigator may determine that the proposed offer amount is insufficient or the payment terms are too extended to recommend acceptance.
If you have questions about the IRS Offer-In-Compromise Program, call Loan Lawyers. Our Fort Lauderdale debt relief attorney helps individuals with problems related to the payment of their debts. If you have assets subject to an IRS tax lien, we can help. Contact our office today by calling 954-523-HELP (4357) and see how we can help.
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Matis Abarbanel is the founding partner and senior attorney at Loan Lawyers in South Florida. He focuses his practice on consumer rights, helping homeowners navigate issues such as foreclosure and financial hardship. Matis also brings a wealth of experience from his previous work in personal injury law. As a devout Chasidic Jew, he is committed to making a positive impact in his community and dedicates his efforts to charitable initiatives through his non-profit organization, The Center, which aids at-risk Jewish youth. Matis actively serves clients across South Florida and is passionate about empowering individuals to secure their rights and achieve a better future.
