The IRS has many programs available to taxpayers who have unpaid tax bills. One of the most popular programs is called the IRS Offer in Compromise. The IRS receives a substantial number of OICs each year, but has only limited processing capabilities in Memphis, TN and Brookhaven, NY (the two locations in charge of processing the offers).

The IRS applies the same collection standards utilized in installment agreements to offers in compromises. They will allocate an amount for clothing, food, housing related costs, vehicle transportation, and medical or dental costs. They will also consider any legal cash commitments like student loans, alimony and child support. Ultimately, based on this analysis, the IRS determines whether it is possible to grant relief under an offer in compromise.

The rejection rate is very high. This often is the case as submitted documentation is often incomplete, the taxpayer is delinquent with tax filings or the taxpayer earns above the required financial allowance. Getting the offer in compromise help you need to be successful is of great importance.

If the IRS sends you a response, make sure that you respond promptly. You may only have a few weeks to get the final information prepared and submitted back to the IRS. Failing to timely respond is often a reason for rejection.

The taxpayer has a few weeks to respond with the requested items. If the response is not timely, the IRS can return the offer and dismiss the offer if need be. If the offer is returned, the IRS will not refund the processing fee.