Taxpayers can appeal a rejected offer in compromise?

Sai CPA Services brings to your attention the IRS tips for a rejected offer in compromise?

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Offer in Compromise (OIC) Overview?

An?Offer in Compromise (OIC)?is a program by the IRS that allows taxpayers to settle their tax debts for less than the full amount owed. It’s designed for individuals who cannot pay their full tax liability, or if doing so would cause financial hardship.?

Eligibility Criteria?

To be eligible for an OIC, taxpayers must:?

• Have filed all required tax returns.?
• Made all required estimated payments.?
• Not be in an open bankruptcy proceeding.?
• Have a valid extension for a current year return (if applicable).?
• For employers, have made tax deposits for the current and past two quarters.?

Application Process?

Applicants must submit:?

• Form 433-A (OIC) for individuals or Form 433-B (OIC) for businesses.?
• Form 656(s).?
• A non-refundable application fee of $205.?

• An initial payment for each Form 656.?

Evaluation Process?

During the evaluation:?

• Non-refundable payments and fees are applied to the tax liability.?
• The IRS may file a Notice of Federal Tax Lien.?
• Other collection activities are suspended.?
• The legal assessment and collection period is extended.?
• The taxpayer must comply with the terms of their offer.?
• Existing installment agreement payments are not required.?
• The offer is deemed accepted if not determined within two years.?

If the Offer Is Accepted?

Taxpayers must:?

• Adhere to all terms in Section 7 of Form 656.?
• File all required tax returns.?
• Make all necessary payments.?

5. If the Offer Is Rejected?

Taxpayers have the right to:?

• Appeal the rejection within 30 days using Form 13711.?

6. Deciding to Submit an Appeal?

Before appealing, taxpayers should:?

• Review the Income/Expense and Asset/Equity Tables from the rejection letter.?
• Assess Form 656 for further understanding.?

7. Preparing for an Appeal?

Taxpayers should gather:?

• Form 433-B (OIC) or Form 433-A (OIC), depending on their status.?
• Supporting documentation for businesses or individuals, as applicable.?

8. Addressing Disagreements?

When disputing the rejection:?

• Provide evidence supporting the disputed income, expense, and asset values.?

For more Information and Guidance, please contact Sai CPA Services.?