What happens if the IRS rejects my Offer-in-Compromise?
Potential clients who have already filed Offers-In-Compromise often want to know what will happen if the IRS rejects their Offer-in-Compromise.
This is our Morning Coffee Series, and we’ve got some information about that.
What if IRS rejects an Offer-In-Compromise filing? The good news is that an Offer-In-Compromise can be recalculated, refiled, and renegotiated.
Why did my Offer-in-Compromise get rejected?
An IRS Offer-In-Compromise can be rejected for any number of reasons.
The most common reason is that the IRS viewed the offer as insufficient; the offer just was not big enough. This means that the reviewer of the offer considered that the business owner might have more assets, more money, which they could use to pay the tax liability.
What are my options?
Sometimes the IRS will counteroffer for more than what you offered. In that case, your tax attorney should consider whether you have any special circumstances.
If you do have special circumstances, the offer could be accepted by IRS as presented. In the case where there are no special circumstances to consider, the IRS still will allow you to increase the offer amount.
After IRS rejects your offer, you still have 30 days from the date of that rejection letter to appeal their offer and appeal the offer rejection. The rejection letter outlines the procedure for filing and having an appeal.
Keep in mind that the appeal will likely require legal analysis and writing. You may need an attorney.
You may also be able to request an installment agreement. If the period of time that the IRS can collect is favorable to you, you may still end up with something that looks like an Offer-In-Compromise settlement when all is done.
That’s all for today, but we’ve still got more questions to cover. And we do that throughout our Morning Coffee Series.
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