IRS Offer in Compromise (OIC) is one of the simplest ways for taxpayers to settle their outstanding tax liabilities, but that doesn’t mean everyone can qualify for it. In many cases, and due to a myriad of reasons, requests for an IRS Offer in Compromise are rejected. The IRS may offer to adjust the amount in the request to settle the outstanding taxes but that can still be too much for the taxpayer to afford. In such cases, the taxpayer has the right to administratively appeal the rejection of their OIC request to the IRS Office of Appeals. In this article we give you an overview of how to appeal a rejected Offer in Compromise to settle a tax debt. Read on.
The Appeal Filing Process
A taxpayer can appeal a rejected OIC only after they have received an OIC denial letter from the IRS. After receiving the letter, the taxpayer has 30 days to fill out and submit “Form 13711 – Request for Appeal of Offer in Compromise.” Another way to appeal a rejected OIC is writing a formal letter to the IRS. Include: your basic details (name, address, SSN, and phone number), a brief statement explaining your intent to appeal the rejected OIC, a copy of the rejection letter, the overall tax periods of the years that the OIC would have covered, and a list of the items with which you disagree along with your reason(s) for disagreement. Furthermore, you can provide any additional information for the appeals office to consider.
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Possible Reasons for Filing an Appeal
A taxpayer can appeal a rejected OIC for numerous reasons. Having said that, it is important to consider certain key factors before proceeding with the appeals process. For starters, a taxpayer must determine exactly what they are appealing other than ‘the denial.’ Some taxpayers also disagree with the counter provided by the IRS, that can be appealed. Bear in mind that the appeals process prolongs the time it will take to come to an acceptance or denial of the offer in compromise. This is because a denial of your OIC request is a proposed denial for a period of 30 days following the decision; it does not become final until the 31st day or until your appeal has been resolved. It is, therefore, important to assess whether the desired adjustment warrants going through the appeals process. A taxpayer should keep in mind that there is no guarantee that an appeal will change the initial rejection.
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Questions to Ask Yourself
If the desired adjustment amount is too large for you to pay, or if the IRS rejects your OIC request, then it would make sense for you to appeal the rejection. Having said that, it is always important to consider whether you have a valid reason for appealing. Ask yourself the following questions to determine whether should appeal a rejected OIC:
- Has the IRS made a wrong decision due to an inaccurate or incorrect interpretation of the law?
- Has the IRS applied any law improperly, due to a misunderstanding of the facts involved in the case?
- Has the IRS taken any inappropriate collection actions against you?
Please note that if you decide that appealing the rejected OIC will be appropriate, you must be ready to provide substantiating evidence to support your appeal.
The Last Word
The world of IRS taxation and provisions is often overwhelming for taxpayers, which is one of the reasons why a lot of people tend to ignore IRS issues, which should never be the case, as any delay in action on IRS problems will only worsen the scenario. If you are facing any IRS tax related trouble, you must not waste any time in seeking the help of an experienced IRS tax lawyer. That is when you can count on the experts at the Law Offices of Nick Nemeth. To discuss your IRS problems, you can contact us for a free no-obligation consultation by calling (972) 426-2553. Alternatively, you can also fill out our contact form and we’ll take it from there.
