Law Office Of Mary E. King, P.L. Attorney and Counselor Of Law Because Life Should be Less Taxing ® 941-906-7585
941-906-7585 Florida Bar Member
Sarasota County Bar Member

How To Respond To An Offer In Compromise Rejection

An Offer In Compromise is a settlement that one makes with the Internal Revenue Service. A person will make a lump sum payment that is less than what they originally owed. An Offer In Compromise can alleviate the tax burden that one is experiencing. Unfortunately, Offer In Compromise rejection is not that common. In fact, the Internal Revenue Service rejected 57.4 percent of the offer in compromise applications in 2014.

 How To Respond To An Offer In Compromise Rejection

Reasons for Offer In Compromise Rejection

  • - The Internal Revenue Service believes that the amount is too low, and you will need to pay more.

  • - You have high expenses or are living above your means.

  • - The Internal Revenue Service believes that you are able to pay the full amount that you owe.

It is important to remember that a rejection is not the same thing as a return. You have the right to get an Offer In Compromise apeal if your application is rejected. However, you cannot get an appeal if your application is returned. Here are some of the reasons your application may be returned:

  • - The Internal Revenue Service requested additional information, and you did not provide it.

  • - You did not pay the application fee.

  • - You have filed for bankruptcy.

  • - You signed up for a payment plan, but you did not keep up with the monthly payments.

  • - You submitted a similar offer.

  • - The Internal Revenue Service believes that your offer is frivolous.

  • - You did not comply with the rules.

  • - There were additional liabilities accrued.

Even though you are not able to get an Offer in Compromise apeal if your application is rejected, you can still send in another application. However, you will have to correct whatever issue has been cited in the area.

How to Appeal

You will need to file an appeal within 30 days. Your appeal will not be accepted if it is not accepted within 30 days. Your rejection letter will have information about all of the things that you will need to do in order to appeal. It will also have information about where you need to send in an application.

The Internal Revenue Service can also provide you with Offer in Compromise help. They have information on their website about whether you should appeal. However, the self-help tool will only work if you have received a rejection letter, are not self-employed, and you are a W-2 employee.

Keep in mind that you are still able to file an appeal even if those qualifications are not met. You can use one of the following methods in order to file an appeal.

Method 1

  • - Complete an Offer In Compromise form.

  • - Have a tax professional complete a Power of Attorney and Declaration form.

  • - Send in these forms along with your rejection letter.

Method 2

  • - Send in forms with your contact information and social security number.

  • - Send in a copy of the rejection letter.

  • - List the years that you owe taxes for.

  • - List the reasons that you believe the rejection is invalid.

  • - Provide documents that support the reason you do not agree with the rejection.

If you have any questions, then you can get Offer In Compromise help from a professional. There is also a number on your rejection letter that will allow you to directly get in touch with the Internal Revenue Service.

How to Make a Larger Offer After Being Rejected

If the amount that you originally asked for was too small, then you can make a larger offer. You will need to submit the paperwork along with the increased offer.

Do You Qualify for an Offer In Compromise?

Many applications are rejected because people do not know whether they qualify for an Offer In Compromise. Making a deal with the Internal Revenue Service is not the only thing that you have to do in order to get your tax debt reduced. You must be able to prove that paying the tax debt in full will create a major hardship for you. There also has to be doubt about whether the IRS will be able to collect the full amount now or in the future.

Attorney Mary E. King

AVVO Rating 10 out of 10 Attorney Mary King A+ better business bureau rating 5 out of 5 rated Member Florida Bar AV Rated
espanol Tax Relief Videos Tax Relief Videos Watch Now