Your circumstances will be considered when determining to release or keep the levy in place while the offer is pending. We may be able to remove the levy if it was placed on your account after the IRS received date of the offer in compromise. An investigation of your offer may not be completed while there is a pending claim or an open audit of any tax year on which you owe a liability. If you submit a claim requesting relief under innocent spouse provisions, you have been notified a tax year will be audited, or currently have a tax year under audit, we recommend you wait for the resolution of the matter prior to submitting an offer.
If we cannot complete investigation of your offer due to a pending examination or claim, the offer may be returned and any payments and application fee submitted will not be refunded. Prior to filing a Doubt as to Liability Offer in Compromise you should understand the difference between doubt as to liability and doubt as to collectability. Understanding this difference will help you determine which application form is the most appropriate for your situation.
Doubt as to liability is when there is a genuine dispute as to the existence or amount of the correct tax debt under the law. Doubt as to collectability is when you agree with the amount due, however you are unable to pay the entire amount owed. You may provide additional verification or documentation to support a different valuation to the employee investigating your offer. At any time, you may ask for a telephonic conference with the offer manager to discuss areas of disagreement.
Additionally, certain disputes may qualify for Fast Track Mediation which allows for an expedited review of a specific area of disagreement. The mediation is not binding on either party, and certain cases and issues are not eligible. For more information, see Fast Track Mediation. If you have received the rejection letter, see below: After the offer has been accepted, rejected or returned , Fast Track Mediation does not apply once a rejection letter has been issued.
A Form does not authorize your appointee to speak on your behalf or to otherwise advocate your position before the IRS. Therefore, your appointee cannot represent you in a collection matter, such as an offer in compromise, before the IRS. No, we are unable to consider an offer while there is an open bankruptcy; once it is discharged and closed, you can file an offer.
You must file all tax returns you are legally required to file for personal or business taxes. If you have a valid extension and have made your required payments, you are considered current for that unfiled return. Estimated tax payments must equal either percent of your total tax from the prior tax year, or 90 percent of the income tax you expect to owe for the current year.
Divide the total by 4 to get your quarterly payment amounts. All estimated tax payments that are due should be paid prior to filing an offer. The number of Forms , application fees, and offer payments required are based on the types of taxes you want to compromise.
The following number of Forms , application fees, and offer payments must be sent with the offer unless payment is not required because you qualify for the Low Income Certification box in Section 1 of the Form and check the box :.
One Form with one application fee and one offer payment if you are compromising either your individual tax liability or two taxpayers owe only joint liabilities. Note: This includes divorced, separated, or married couples living apart if all liabilities are joint and they choose to file a joint offer together.
One Form with one application fee and offer payment if you are compromising either a partnership or corporate liability. Two separate Forms , one for the business or corporation liabilities and one for the individual liabilities, when the intent is to compromise both if:. Both sections should not be combined on one Form One form may be used if your business is a sole proprietorship linked to your SSN. A separate offer, with application fee and offer payment, is needed if your business is not a sole proprietorship linked to your SSN.
You will need to gather information about your household's average gross monthly income and actual expenses. The entire household includes all those in addition to yourself who contribute money to pay expenses relating to the household, such as rent, utilities, insurance, groceries, etc.
This is necessary for the IRS to accurately evaluate your offer. It may also be used to determine your share of the total household income and expenses. You may designate which tax debt you would like to apply your offer payment s to in writing when the offer is submitted or when the payment is made. You may not designate the application fee, or any payment after the IRS accepts the offer. In the absence of any written designation request, the IRS will apply the offer payment s in the best interest of the government.
You should send two checks, one for the application fee and one for the required offer payment. If only one check is received, the IRS will apply the application fee first and then the remainder toward the required payment amount.
If you do not qualify for the low income certification, or have not checked the low income certification box, the offer will be returned. If you qualify for the low income certification, and have checked the box, the money will be held as a deposit until a decision has been made on your offer.
This is good in a way for now you know that you have to tackle all your well-documented issues. Apart from the question how long does an offer in compromise take, your mind will also be full of questions about your appeal and its consideration.
With an appeal, the answer to the question how long does an offer in compromise take changes again. The entire process can even consume another two months to a complete year. So yes, filing an offer in compromise is indeed a daunting task. You should never really proceed at filing without any professional assistance as a lot of things could go wrong and you could face a possible rejection. After knowing the estimated time frames for your question how long does an offer in compromise take, it is also important for you to realize what the IRS expects of you if you qualify for the fresh initiative program:.
All those who are curious to know the answer to the question how long does an offer in compromise take should also know the reasons which might make their application unacceptable.
These may include:. Hopefully by now you know how long would an offer in compromise take in different cases; approval, rejection and appeal. If you did not qualify for the offer in compromise program, you can apply for Penalty Abatement or could enter into a Partial Payment Installment Agreement. You must be logged in to post a comment. Send Me More Information. IRS keeps updating its rules and regulations.
We make sure that our clients stay up to date with the latest changes. Fill in the information below and get a personalized over-the-phone consultation. Let us assist you on your way to financial freedom. September 14, What is an Offer in Compromise? The Offer in Compromise Basis To know how long an offer in compromise takes, you must first know the ground rules under which an offer in compromise can be availed.
There is uncertain liability that the IRS has made some errors in estimating your taxes. This one is rarely granted. The compromise is only struck if there is a genuine dispute. There is a doubt to collectability. This means that there is an uncertainty related to the total amount payable which means that the total amount might not be able to be collected during the statute of limitations period. In such cases, the taxpayer has the ability to pay back something but the total income is considerably less than the tax liabilities.
If something in your financials does not look right, provide a good explanation for it in the cover letter. If you have more deposits than you make in income, then explain why you have that extra money. Explain if it is a loan or something else and why it should not be considered as income. If you have any medical conditions, explain them in the cover letter and include supporting documentation.
How long will your Offer In Compromise take? It depends on the above factors and your responses. Give good responses and you will help speed things up. You might be one of the lucky ones that has their Offer done in a few months. If not, just wait and see what happens.
They usually do not help. See our results page for our most recent Offer In Compromise results on the left side of our About Us page. Any application fee included with the OIC will also be returned.
Any initial payment required with the returned application will be applied to reduce your balance due. This policy does not apply to current year tax returns if there is a valid extension on file. You are not eligible if you are in an open bankruptcy proceeding. Use the Offer in Compromise Pre-Qualifier to confirm your eligibility and prepare a preliminary proposal.
Your completed offer package will include:.
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