If the IRS rejects an OIC, the taxpayer will be notified by mail. The letter will explain why the IRS rejected the offer and will provide detailed instructions on how the taxpayer can appeal the decision to the IRS Independent Office of Appeals. First, try to talk directly to the specialist and try to persuade him to reverse course. Ideally, this should have been done before the rejection letter came out, but sometimes you can save an offer from the ashes with a little finesse and a good argument.
The IRS will try to contact you to provide an opportunity to pay the missing amount. If you do not make the payment, the offer will be withdrawn and returned to you without the right to appeal. All payments already received will be applied to your tax liabilities. The IRS will also keep the application fee.
You can't appeal an offer returned by commitment. Instead, you must correct the request and resubmit it. Conversely, if the IRS rejects your offer, you can accept the rejection or appeal. If you appeal, the IRS will review your request again and review any new arguments or documents you provide.
The IRS can make a lot of mistakes in its commitment analysis. You have the right to appeal the rejection and put things in order. The rejection letter from the IRS is final only if you let it be final. The rejection gives you 30 days to appeal and challenge the IRS calculations; nothing is final until your appeal is heard.
Don't assume that the IRS is right. Even if they're correct, that doesn't mean you don't have other resolution options, such as bankruptcy, to consider. What happens if the IRS rejects a request for a commitment offer? The good news is that a commitment offer can be recalculated, re-archived and renegotiated. It's not the end of the world if you receive a rejection letter from the OIC.
You can still overturn the decision by filing an appeal. Applicants have 30 days after receiving the denial to file an appeal. You will need to complete Form 13711 (IRS Commitment Offer Appeal Request) to process the request. If your offer isn't accepted and you haven't incurred any additional tax debts, your installment agreement with the IRS will be reinstated at no additional charge.
The IRS will keep any refunds, including interest, for tax periods that extend until the date the IRS accepts your offer. When an offer is not met, the IRS can collect or file a lawsuit to collect the full balance of the offer or an amount equal to the original tax debt minus any payments received under the terms of the offer. If you can't pay your tax debt in full or if paying it all will lead to financial difficulties, a commitment offer (OIC) may be an option. If you agree to the rejection, you can submit the full payment of your tax debt to avoid additional interest and penalties, or request an installment agreement to pay your tax debt.
If the IRS rejects your offer, you have the right to appeal or meet with an appellate technician to discuss IRS measures to resolve the tax liability. The likelihood of reaching an agreement with the IRS for your first compromise offer is rare, but you can improve your odds by appealing the decision and consulting with a tax professional. However, the IRS will send you a notice 30 days from the date of the notification to respond to the IRS requesting that the decision to return the offer be reconsidered. Or you can provide more details about how it would be unfair to hold you responsible for the full balance of your tax debt.
If the IRS accepts your offer, but you don't file or pay all your taxes on time for five years after acceptance, the IRS will notify you that your offer is in default and you can rescind it and owe all of your debt (not the reduced amount of the offer). The IRS also takes into account whether you are experiencing economic hardship or not and the fairness of requiring you to pay the full tax debt. LITCs can represent taxpayers in audits, appeals and tax collection disputes before the IRS and in court. A commitment offer (OIC) is an IRS settlement option to reach an agreement on how to manage the existing tax liability.
In fact, studies indicate that three out of four OIC are rejected, which is not exactly a good sign for millions of Americans who have problems with tax debt. .
