IN series 1 we talked about the factors you need to consider before you decide choosing OIC, and meeting the compliance requirements before proceeding.
If your offer is accepted, congratulations! What happens if your offer is rejected?
Here’s what you need to do if you offer is rejected and you have disagreed items:
• Offer was rejected. You received a letter notifying your offer was rejected. You have 30-days to request for appeal of the decision.
• Items you do not agree. Prepare a list of specific items you do not agree. Explain you do not agree on each item. Gather and submit only valid supporting documents for the items you do not agree.
• Review information previously submitted. 1) Review Form 433-A collection information statement for wage earners and self-employed individuals you submitted. For the past three months has there been any changes in your monthly income and expense statements, social security, pension, other income, liens and encumbrances for your home and other properties, payments for utilities, mortgage, property taxes, taxes you owed from other government agencies, insurances, out of pocket costs from your insurances, health condition, recent personal income tax return Form 1040, court-ordered payments, etc. From the most current past three months statements, analyze those that have detrimental effect on your finances and health conditions; 2) The OIC denial letter asset-equity (AET) and income-expense (EIT) tables provided to you, review and compare with the following standards: Collection Financial Standards, National standard expense allowed for food, clothing and miscellaneous monthly expense, National standard expense allowed for out-of-pocket healthcare expenses, Housing and utilities expense allowed for housing and utilities monthly expense, Transportation expense allowed for monthly transportation expenses; 3) Read through again the instruction of Form 433-A and identify any changes and updates; 4) Have you provided complete and detailed supporting documents, schedules, and other required attachments?
• Form 13711 or a letter. You may request for an appeals conference by completing
a) Form 13711 (Request for Appeal in Offer in Compromise) or
b) A letter with the following information:
• Name, address, SSN, and daytime telephone number
• A statement that you want to appeal the IRS findings to the Appeals office
• A copy of your rejected offer letter
• Tax period or years involved
• A list of the specific items you don’t agree with and a statement of why you don’t agree with each item
• Any additional information you want Appeals to consider
• The facts supporting your position on any issue that you do not agree with
• The law or authority, if any, on which you are relying
• Sign the written protest, stating this it is true under the penalties of perjury
• Other self-help tools. You may explore the IRS website and look for Self-Help Tool for Appealing a Rejected Offer in Compromise (OIC) or visit: https://www.irs.gov/compliance/appeals/appeal-a-rejected-offer-in-compromise-online-self-help-tool-start.
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Disclaimer: Any accounting, business or tax advice contained in this communication is neither intended as a thorough, in-depth analysis of specific issues, nor a substitute for a formal opinion, nor is it sufficient to avoid tax-related penalties.
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Al-os & Associates Accountancy Corporation provides accounting and tax services to individuals, corporations, LLCs and business entities. The Firm has a niche in defending taxpayers audited by the IRS and other governmental agencies.
