IRS Denied My Offer in Compromise Due to a Failure to Provide Information; Why?
Rejected OIC- Missing information
I Just got off the phone with a woman who said her Offer in Compromise was denied due to missing information. I asked her two things, 1) Did she provide the documentation requested? 2) Has she filed an appeal? To the first question, she said the IRS was wanting to know why her income this year was so much less than the income indicated on the last tax return. She did not know what to provide to support this inquiry. To the second question, she said the Offer Examiner had just issued a denial, so there was time for an appeal. I told her, and I quote, “I know this sounds salesy but you are going to want to get some help, or your case will likely be denied in appeals as well.” The only option you have after that is US Tax Court, and that would be terribly expensive.
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 – Considered Full Pay
- Dissipation of assets
This is item 2, Missing information
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, let’s 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.