Processing times vary, but you can expect it to take at least six months for the IRS to decide whether to accept or reject your compromise offer (OIC). The process can take much longer if you have to challenge the examiner's findings or appeal your decision. In most cases, it takes about six months for the IRS to decide whether to accept or reject your transaction offer. However, if you have to challenge or appeal your decision, the process may take much longer.
There are cases where the IRS doesn't even consider your offer as a transaction. It usually takes six to nine months for the IRS to respond to your offer in a commitment request. Staff, funding and the time of year when the OIC is presented influence the time needed for the decision-making process. If more than two months have passed, you should check with the IRS to see how the process progresses.
It's common for the IRS to take up to six months to make a decision. Some decisions may take longer than a year. Generally, a transaction offer decision can take 9 to 12 months. But these are not typical times.
Jim is also the author of the Tax Problems and Solutions Manual, a publication intended to help tax professionals work more effectively on post-tax issues and to resolve their clients' most common tax problems. The IRS Offer in Compromise program is very popular because it allows you to pay your IRS tax debt for less than you owe. Basically, you provide the IRS with detailed financial information so that the IRS can decide whether or not to reduce your tax debt. For example, you must make the required estimated tax payments and federal tax deposits, if applicable.
However, the IRS will release the tax lien 30 days after the payment terms are met and the payment is verified. To convince the Internal Revenue Service to settle your tax debt for less than you owe, you must show that the offer is the most you can afford. You answer simple tax questions, then Wiztax calculates the amount of your transaction offer and complete all the IRS commitment offer forms you'll need to file. In fact, the IRS only accepts these offers if it believes that the taxpayer cannot pay the tax liability in full or through a monthly payment plan.
If you owe taxes to the IRS that you can't pay in full, you have options available to achieve tax debt relief. The IRS offers installment agreements as a solution for taxpayers who cannot pay their tax debts in a lump sum. Remember that if a licensed tax professional doesn't think you're a good candidate for a transaction offer, they'll help you find the next best option to resolve your taxes with the IRS. If the IRS believes that you can pay your tax bill in full or by making monthly payments, the agency will not approve your offer.
When an offer is not met, the IRS can collect or file a lawsuit to collect the full balance of the offer or an amount equal to the original tax debt minus any payment received under the terms of the offer. You can designate in writing which tax debt you would like to apply the payments for your offer to when the offer is submitted or when the payment is made. From the date the offer is accepted, no additional interest will be added to your tax debt or to the amount of the accepted offer. Generally, the IRS will only reduce your tax debt if you convince the agency that your offer is the most you're likely to receive.