Appealing a Rejected Offer in Compromise: The Right Way Versus the Wrong Way

The IRS offer in compromise may be an excellent option for resolving tax debt, but it’s never a sure thing. Typically, less than half of the applications are accepted. In 2014, for example, just 27,000 of the 68,000 offers the IRS received were ultimately accepted.

You’re certainly not alone if you’ve suffered rejection at the hands of the IRS — but all hope is not lost. The IRS provides an appeals process, through which you can demonstrate that you meet the criteria for an OIC. How you proceed with your appeal may determine whether you ultimately succeed, as we demonstrate below:

The Wrong Way to Appeal

The IRS will take any opportunity to reject your appeal. Your failure to follow strict directions could result in a swift rejection. Common examples of appeal mistakes include:

  • Filing the appeal more than 30 days after the initial rejection was received.
  • Lack of evidence demonstrating that the initial OIC rejection was not warranted.
  • Failing to include requested details such as your name, the tax year, a statement of appeal, or a copy of the letter highlighting the proposed changes.

The Right Way to Appeal

Many of the mistakes outlined above can be avoided if you work with a tax professional to draft a strategic appeal. This person can help you submit a complete appeal that contains the extensive evidence needed to sway the powers that be at the IRS. Other suggestions for improving your chances of success in the appeals process include:

  • Abiding by all grounds for appeal outlined by the IRS.
  • Completing Form 13711: Request for Appeal of Offer in Compromise.
  • Including detailed evidence to support your argument against the original IRS rejection.

Don’t let an IRS OIC rejection keep you from achieving a favorable tax resolution. The Highland Tax Group can assist you with all elements of the appeals process — reach out today to learn more.