An Offer in Compromise is one of the most valuable tools a taxpayer has when dealing with and oustanding tax liability owed to the IRS. The government is not required to accept your OIC, but if your offer is rejected you do have the opportunity to appeal a rejection—at which point you should make sure you have all your “i's” dotted and “t's” crossed.
You Only Have 30 Days to Appeal an OIC Rejection
If the IRS rejects your Offer in Compromise, usually it is because either the revenue officer determined you are lying about your finances, or because he decided you are capable of paying more than you and your lawyer have offered. In the latter case, you are entitled to file a “Request for Appeal of Offer in Compromise.” On this form, you can point out that:
- The IRS has overestimated the value of your house (especially given the soft housing market)
- You lost your job, or you found a new job with a much lower salary
- Your number of dependents increased (say, with the birth of another child)
- The IRS made a mistake when assessing the worth of your assets (for example, your retirement account)
- Your financial circumstances changed drastically since you submitted your initial Offer in Compromise
Of course, it will do you no good simply to make these statements if you don't have any supporting evidence. The burden of proof is on you to convince the IRS to reverse its initial ruling, and you can do this only by submitting detailed financial records (paychecks, mortgage payments, bank statements, etc.).
Needless to say, your chances of a reversal will be greater if you can demonstrate that the IRS made a genuine error when assessing your finances, and that paying the full amount of your back taxes, penalties, and interest would drive you into bankruptcy.
Need to Appeal an Offer in Compromise? Call Travis Watkins Today
If your initial bid for an Offer in Compromise has failed, you should hire a tax attorney who knows how to deal head-to-head with an obstinate IRS revenue officer. Contact the tax experts at Travis W. Watkins, PC (800-721-7054) to learn what we can do for you!