The IRS’ Offer in Compromise is a tax settlement agreement offered by the IRS. If you cannot pay your tax bill, you can apply to pay a specified, lower sum that the IRS agrees to. If you feel like you are drowning in tax debt, this is a way that you can get back on top of it again.
Unfortunately, an OIC does not always have the outcome taxpayers need. If you receive a lower offer than you feel you deserve or if the IRS rejects your application, there are avenues you can take to secure an offer.
Is the offer valid for your situation?
One of the most common reasons people face rejection or receive an offer lower than expected is clerical errors. Most taxpayers do not know how to fill out the paperwork correctly and may not learn how to strategize to receive the most beneficial deal.
When you receive your letter from the IRS, determine why the IRS rejected your offer or provided you with a lower offer than you expected. Some common errors include missing information, not paying the application fee and having an open bankruptcy.
Do you need a new valuation?
If you need a new valuation, you can provide additional documentation anytime. You may want to request a conference where you can discuss your situation with an offer manager. In the meeting, you can discuss the disagreement and try to find solid ground. Additionally, disputes may qualify you to go through mediation to determine a fair offer in compromise.
If your Offer in Compromise does not turn out how you expected the first time, it does not mean you have to give up.