Offer in Compromise
Step 5: Review and Submit to IRS
You’re just about ready to send your Offer in Compromise package to the IRS! Let’s make sure you have all the information to complete your package so there aren’t any speed bumps down the road.
You might be offering TOO much!
The IRS won’t disagree with an offer that is more than what they expected. In other words, if the offer you make is more than what they were originally expecting, they will automatically agree to and accept your higher offer. Make sure you are including all the necessary and allowable expenses and other requested information to make your offer as low, and accurate, as possible.
You might be offering TOO little!
Over-reporting expenses and including other disallowed information on your Offer in Compromise will raise red flags at the IRS. Your Offer Examiner will likely disallow certain expense items in your financials and ask for substantiation (proof) for other items claimed. It is during this process that the Offer Examiner will try to raise the offer amount.
Pro Advice: Transaccts tax consulting
Not sure if you prepared the Financial Statements and Application forms properly?
Transaccts can help! Learn more>
- We will review your financial statements for accuracy and let you know what else you can include to lower your offer
- We will review your application details for accuracy
- Be better prepared for questions from the Offer Examiner
- Know what is allowable and what might be disallowed
How to write checks/money orders/cashier check to IRS:
- Make checks or money order payable to United States Treasury
- Include your Social Security number in the memo
- Include “OIC” in the memo
- Issue TWO separate checks; one for the application fee and one initial offer payment
If you are settling personal AND business tax debt, you will have TWO applications to send, along with accompanying financial statements. Therefore, you must send TWO separate application fees.
Where to send Offer in Compromise package
If you live in:
AL, AR, FL, GA, HI, ID, KY, LA, MS, NC, NM, NV, OK, OR, TN, TX, WA, WI
Then mail to:
Memphis IRS Center COIC Unit
PO Box 30803, AMC
Memphis TN 38130-0803
If you live in:
AK, AZ, CA, CO, CT, DE, IA, IL, IN, KS, MA, MD, ME, MI, MN, MO, MT, ND, NE, NH, NJ, NY, OH, PA, RI, SC, SD, UT, VT, VA, WY, WV; DC, PR, or a foreign address
Then mail to:
Brookhaven IRS Center COIC Unit
PO Box 9007
Holtsville, NY 11742-9007
Here is what happens next:
1. Send package, 2. Letter of receipt, 3. Assigned examiner, 4. Review, 5. Dispute, more info 6. Accepted/denied
It can take anywhere from 2-5 months for the IRS to respond to your Offer in Compromise package. They will send you a letter to confirm that your package has been received and assigned to an Offer Examiner. The letter will contain Offer Examiner contact information, such as: name, phone number, mailing address, fax, and business hours.
Why monitor your OIC so carefully?
It is extremely important to monitor inbound mail to the address listed on your Offer in Compromise paperwork. You also need to understand what the letter attempting to explain to you. Missing a deadline for a required response can result in:
- Offer rejection
- Delayed processing
- Collection enforcement (wage garnishments or bank levy)
Your package may get lost in the mail or mishandled at the IRS. It is important to verify that your package has been delivered and received by the IRS.
We recommend calling the IRS 45 days after the OIC package has been sent, and every two weeks thereafter until you can confirm that the offer has been received.
When calling the IRS, you can ask if: “my Offer in Compromise has posted to my account as being received?”
Once your package has been received, you may have to wait 2-4 more months before it is assigned to an Offer examiner.
If you sent an OIC for individual and business tax debt, only one examiner should be assigned.