If you are planning to submit an offer in compromise to the Internet Revenue Service (IRS), you need to be prepared that it can be a long and time-consuming process. While your experience may differ from the experiences of others, know that it is not unusual for an offer in compromise to take an entire year to complete from the time you initially submit the offer until the offer is finally accepted (or possibly rejected) by the IRS.
Why does it take so long for the IRS to evaluate an offer in compromise? There are several reasons for the length of time, but one of the primary reasons is the individual nature of the offer in compromise process.
In an offer in compromise, it is a given that the taxpayer has a tax liability that they cannot afford to pay or otherwise believe it would be unfair for them to have to pay. This situation could have arisen for the taxpayer because of a job loss, an illness for the primary wage earner in the household, or for a variety of other reasons. When the taxpayer submits the offer in compromise, they have to state the reason why the offer should be considered and provide documentation to support their case. This documentation will normally need to include paystubs, bank statements, mortgage statements, auto loan statements, and any other documents that identify just how much money the taxpayer earns, how much they spend, and on what things the spend occurs.
Because there are a variety of reasons why taxpayers submit an offer in compromise and an even wider array of supporting documentation that can be included to support the offer, the review and approval process for an offer cannot be automated. An agent of the IRS must manually review the offer request and the supporting documentation to make a determination as to whether the offer is complete, for a legitimate reason, and includes sufficient supporting evidence.
Since the IRS is being asked to accept less than the full amount owed to them for a tax liability, they are thorough in their investigation to be sure that the taxpayer is really in a position such that they cannot pay the obligation or that paying the obligation would otherwise create an undue burden on the taxpayer. If the IRS believes the taxpayer’s position is not sufficiently supported or for a large enough amount, the IRS can request additional documentation or reject the offer. This means additional time is used for the taxpayer to appeal the rejection or restart the process by filing a new offer.
How can I get help in preparing my offer in compromise?
If you need help determining if your situation warrants submitting an offer in compromise or preparing the necessary offer in compromise materials, a trained tax professional can help you with the matter. A tax attorney will have experience in evaluating situations like yours to know if an offer in compromise is an option that may work for you, as well as in structuring the offer to increase the likelihood that it will be accepted.
By completing the short form found below, your information will be submit to a tax attorney who can begin evaluating your case and advising you on if an offer in compromise is the right option for you. This evaluation is free of charge, 100% confidential, and does not obligate you to anything further. Therefore, please submit the form today and get the help you need with an offer in compromise.