I had a client come to me in the spring with tattered copies of IRS notifications, an IRS offer in compromise booklet, and several other pieces of paper he couldn’t make sense of. Turns out, he had filed an IRS Offer in Compromise on his own, and it was immediately denied. Fortunately, for our client, he was still within the 30 day time frame to file an appeal on the rejected IRS Offer In Compromise. I wasn’t surprised it was denied, as most offers (up to 75%) are denied, returned, or rejected the first go around. Usually most offers are accepted in the appeals division. Irregardless, we immediately got to work.
Once the client signed the Power of Attorney forms, the service agreement, and remitted our fee, we called the IRS. We started off by filing the Power of Attorney form with the IRS, then figuring out balance dues (our client owed about $80,000), and letting our client know exactly where he stood with the IRS. We also verified the client was current and compliant with estimated tax deposits and withholdings. With our client being a wage earner, this was not a problem as he had taxes withheld at the appropriate rate throughout the year. This work insured we didn’t miss anything prior to dealing with the Offer in Compromise. We also called the OIC specialist who denied the OIC. Of course, we ended up leaving a message, and then immediately filed our appeal (our client didn’t leave much time left on the 30 day window). Now, with the appeal, one must be specific on how it is filed, when it is filed, and where it is sent. All instructions are provided on the denied offer in compromise. Our client hadn’t exactly filled out the IRS forms correctly, nor was his financial statement reflective of the actual offer in compromise. He originally offered close to $4,000, and we came to the conclusion he should have offered closer to $8,500. Therefore, we took the IRS calculation sheet, updated the financial form, and amended the IRS OIC form. Once we had everything together and completed, we sent it over to the IRS offer unit with our appeals request.
The IRS responded to our appeal by assigning the Offer in Compromise to an appeals specialist or officer. She sent out a letter to our attention scheduling a hearing. At times, the IRS appeals office will not sent written notification, instead they will simply call. Which is ok too, we prefer to streamline processes when and wherever possible. We took a peek at the OIC again as it had been several months since we filed our appeal. Everything appeared to be in order. We had a few phone calls with the IRS appeals specialist, and took a look at the numbers she provided. We always ask the IRS to fax over their calculation sheet, if they didn’t send it in the mail. Things were looking up for our client.
The appeals specialist concluded with our offer amount, well, she increased it by about $300, but we aren’t going to fight a small increase, when we’re potentially saving our client over $70,000!! Low and behold, the appeals specialist sent over the appeals agreement, and we signed, dated, and delivered all necessary documents to her within a specific timeframe provided. Each time frame or deadline is important, and if missed, you might risk the chance of losing the appeal, and thus, losing out on a great offer from the IRS. At the end of the day, the Offer in Compromise was accepted for $8,500, thus saving our client over $70,000!!
If you or someone you know has either tried to file an IRS Offer in Compromise on their own, or through their tax professional, and it has been rejected, let us know. We would be happy to jump in and help. Please call us at 720-398-6088.