You realized that your tax liability is more than you can afford to pay, so you submitted an IRS Offer in Compromise (OIC) to the IRS. Unfortunately, after several months of waiting, you have received a letter notifying you that the IRS has rejected your offer. What now?
You can request an appeal of the rejected OIC, but you need to act quickly—you have thirty days from the date of the rejection letter from the IRS to appeal the decision; late appeals will not be accepted.
Common reasons for an OIC to be rejected include missing documentation or IRS calculations indicating that you can pay more than you offered.
Deciding Whether To Appeal a Rejected Offer in Compromise
To help you decide, review and compare these sets of documents to identify any areas of disagreement:
- The IRS rejection letter and the Income/Expense Table (IET) and Asset/Equity Table (AET) that came with it.
- The IOC you submitted, including Form 656, Offer in Compromise, and the Collection Information Statement (Form 433-B (OIC) for businesses and Form 433-A (OIC) for individuals) and supporting documentation.
Filing an Appeal of an Offer in Compromise
If you feel you have grounds for an appeal, complete Form 13711, Request for Appeal of Offer in Compromise, and submit it, along with a copy of your rejection letter, to the IRS office that issued the rejection letter. Form 13711 includes a section for listing details about each disagreed item. Alternatively, you can submit a letter with the same information required in the form.
The following actions may strengthen your appeal:
- Provide evidence for the disagreements you’ve identified. For example, if you disagree with an IRS assessment of one of your properties, include documentation of the correct assessment.
- Provide evidence for any change in your financial circumstances since you submitted your OIC.
- File all required tax returns and make current payments while your appeal is pending.
For expert advice on appealing the rejection of an Offer in Compromise, contact the qualified tax professionals at Highland Tax Group. We have experience negotiating with the IRS and can help you achieve the best possible solution for your case.