Resolving Tax Debt With The IRS Offer-In-Compromise Program, Part 2


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 actually 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 record.

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 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 defense attorney help 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.