How long does the irs have to accept an offer in compromise?

You must comply with the filing and payment of all tax returns for a five-year period from the date the pledged offer is accepted, including extensions. In most cases, it takes about six months for the IRS to decide whether to accept or reject your commitment offer. However, if you have to challenge or appeal your decision, the process can take much longer. There are cases where the IRS doesn't even consider your offer to be compromised.

Processing times vary, but you can expect the IRS to take at least six months to decide whether to accept or reject your commitment offer (OIC). The process can take much longer if you have to challenge the examiner's findings or appeal their decision. The Gartzman Law Firm offers help with the settlement of federal and state taxes, including compromise offers. If a compromise offer isn't for you or the IRS rejects it, you may still have other options through the IRS to get a tax break, such as opting for an installment payment plan or applying for the “currently uncollectible” status.

Prior to his current position, Jim's consulting practice focused on the areas of tax controversy and tax administration, including leading the development of tax problem software products for tax professionals, testifying before Congress, advocating for the transparency and efficiency of the IRS, and proposing innovative solutions on a large scale for taxpayers and tax professionals. Form 656 and the informational compilation statements referred to are available in the Compromise Offer Booklet, Form 656-BPDF. He has been a leader in helping taxpayers and tax professionals resolve tax issues with the IRS, where he had worked for 19 years in various compliance positions. The IRS will not accept your offer on terms of compromise unless the amount you offer is equal to or greater than the RCP.

Instead, they must determine their net realizable capital in assets, plus a future multiplier of their monthly disposable income, which depends on the payment option they choose. Confirm that you meet the requirements and prepare a preliminary proposal with the prequalification tool for offers under conditions of commitment. The letter will explain why the IRS rejected the offer and will provide detailed instructions on how the taxpayer can appeal the decision to the IRS Independent Appeals Office. Lump sum cash offer: Taxpayers can choose to pay the amount of the offer in a lump sum or in installment payments.

The IRS offers installment payment agreements as a solution for taxpayers who cannot pay their tax debts in a lump sum. If your financial situation improves before the collection law expires, the IRS can renegotiate these terms. A returned offer is different from a denial because there is no right to appeal when the IRS returns the offer. This money is not refundable, even if the IRS rejects your offer (the IRS will only apply it to your tax bill).

A lump sum cash offer is defined as an offer payable in 5 or fewer installments within 5 or fewer months after the acceptance of the offer.

Stewart Schlageter
Stewart Schlageter

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