The Most Common Questions People Have About the IRS Offer in Compromise Program

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The IRS offer in compromise provides the promise of a fresh start, complete with considerable tax savings. Unfortunately, this arrangement is notoriously difficult to achieve. Given this program’s high rejection rates, there is no room for error. It’s in your best interest to clarify the following questions well before you apply:

What if my offer isn’t high enough?

Many people purposefully enter excessively high offers in compromise because they fear automatic rejection if their initial offer is too low. In reality, however, the IRS determines the correct amount and provides an opportunity to increase the offer amount. If the requested increase is not accepted, however, the initial offer may be rejected.

Can I contest an IRS valuation?

If you believe the IRS is incorrect in its assessment of your ability to pay, you may be able to contest the initial valuation. To do so, you’ll need to provide additional documentation. Feel free to request a phone conference with the offer manager to discuss areas of disagreement. Otherwise, you may qualify for an expedited approach known as Fast Track Mediation.

Should I make installment payments while an OIC application is processed?

Good news: there’s no need to continue making payments as the IRS processes your OIC. If your offer is rejected, you’ll likely be required to resume payments — but without penalties for payments missed while your offer was processed.

How long can I expect to wait before hearing back from the IRS?

Unfortunately, the IRS is far from prompt when handling offers in compromise. Often, applicants wait for over six months before hearing back. The process can be expedited by working with a trusted tax advisor or resolution service.

Ready to move forward with an IRS offer in compromise? Improve your chances of acceptance with help from the Highland Tax Group. We can negotiate on your behalf to secure the best deal possible. Contact us at your earliest convenience to learn more.