IRS Retroactively Terminated My Offer in Compromise Due to a Failure to Make Offer Payments; Why?
Rejected OIC- Failure to make the non-refundable payment with the application
I just got off the phone with a gentleman who said he received a notice from the IRS stating his Offer in Compromise was terminated due to failure to make the required payments. As part of the conversation, I asked if he elected a cash Offer or deferred? He said cash. I asked if he made the payments in the required 5 months. He indicated that he was in his 6th month and had not paid it off yet. I told him that the IRS was right, he was required to pay off the Offer amount in a 5-month period of time. I suggested he immediately call the Offer Examiner and ask if he paid off the balance immediately if they would reinstate the Offer.
The following are the most common reasons for denial of an Offer In Compromise:
- Failure to maintain compliance by making estimated payments
- Missing information
- Failure to disclose assets
- Failure to maintain compliance due to outstanding returns
- Active Bankruptcy
- Frivolous submissions
- Failure to pay the processing fee unless below a specific income level
- Failure to maintain compliance in the 5-year look-forward period
- Failure to make the non-refundable payment with the application
- Default on a previously accepted Offer
- Do not qualify for an Offer- Considered Full Pay
- Living expenses are considered excessive
- Dissipation of assets
This is item 9, Failure to make the non-refundable payment with the application
Should you get help?
I have seen many people try to prepare their own OIC and fail because they do not fully understand the art of dealing with the IRS. Yes, you can submit an Offer in Compromise yourself but if you are trying to considerably reduce your debt, I recommend you rethink your position.
An “accepted” OIC is not the same as a “successful” OIC.
There is more to it. Sure, the average taxpayer can fill out the forms and after spending hours reading and rereading the instructions provide the substantiation needed for an application to be accepted. How do you measure success? To me, success is measured with an approval on the LOWEST DOLLAR AMOUNT the IRS will accept.
If you feel that you may be in over your head, or just want to get a second opinion, le’ts set up a short call. To avoid the back and forth emails and phone tag, I have included a link to my Calendar https://calendly.com/taxman/tax-problem-resolution-initial-consultation. Let’s set up a 30 min. phone conference to get to know each other. The phone number to call is 855-829-5877 and my extension is 203.