The Internal Revenue Service has taken steps to improve the offer in compromise process for both taxpayers and the IRS, but it can still do more, according to a new report.
An OIC is an agreement between a taxpayer and the IRS that settles a tax liability for a payment of less than the full amount owed. The report, from the Treasury Inspector General for Tax Administration (TIGTA), acknowledged that the IRS has made progress in the offer in compromise process since a previous TIGTA report in 2012.
However, according to the National Taxpayer Advocate’s Annual Report to Congress in 2014, the processing of offers in compromise continues to be one of the most serious problems affecting taxpayers. In our firm’s experience the typical processing time between submission of the OIC and when an Examiner reviews the submission is averaging roughly nine (9) months.
In its new report, TIGTA found that IRS employees did not always complete the initial processing of offers in compromise on a timely basis, nor did they always contact taxpayers by the promised date, or send interim letters when the promised dates were not met. In addition, TIGTA found that 10 of the 92 rejected offer cases in its sample (that is, 11 percent) did not include any documentation that alternative resolutions were discussed with the taxpayer.
The OIC is a powerful tool that unfortunately does not apply to all cases that we handle. Advertisements on television and radio are simply sales tools to get you to call. Be weary of sales persons who promise you results without conducting a thorough review of your IRS transcripts and personal finances.
Contact McCauley Law Office, P.C. today to discuss whether you may qualify for an OIC.