Blog

Back to Blog

Want to File an IRS Offer in Compromise? Fourth, Compliance & The Waiting Game

February 23, 2017

Can I settle my tax debt for less that what I owe? (Part IV)

This post is the fourth of five posts on filing an IRS Offer in Compromise.

Picking up where we left off from our last post, the offer in compromise was submitted and acknowledged by the IRS. While some applicants can sit back and wait for contact, many will have to remain compliant to make sure the offer is actually evaluated.

Compliance

When a taxpayer reaches the point where an offer in compromise is filed, there is an expectation that the taxpayer is now able to remain compliant. Compliance means preventing new tax liabilities from accruing. In plain speak, that taxpayer is now expected to file and pay in full each April. Also, if a taxpayer is required to make quarterly estimated tax payments, those will need to be paid on time as well. If the taxpayer is unsure whether or not estimated payments are required, they should review their last filed tax return as most tax return software will include estimated payment vouchers if the requirement kicks in.

Failure to remain compliant may result in an offer being returned to the taxpayer. A returned offer is treated as if the offer in compromise never took place and there are no appeal rights. The IRS may offer a 30-day window to explain compliance shortcomings, but it is not an opportunity to cure and continue the offer in compromise process. If your explanation is acceptable to the IRS examiner, they may reinstate the case, but it is entirely up to their discretion.

A returned offer can be particularly devastating because it requires the taxpayer to restart the entire offer process and waiting period.

Realistic Waiting Periods

The IRS separates individual tax offers into two categories – regular wage earners and the self-employed. Offers submitted by regular wage earners will be evaluated by the examiners located in Holtsville, NY. When the taxpayer receives their acknowledgment letter, they can be fairly certain that either the examiner will call them right around the date listed in the letter. There are instances when the IRS requires more time, but you will be informed by mail.

For offers where self-employment income is present, the taxpayer will likely receive notice that their offer was sent to a field office outside Holtsville, NY. These offers take longer for the IRS examiner to evaluate, so there is no strict timeline for response. Our office has routinely seen offers take 12-16 months. Please note that for self-employed offers, there is little room for compliance error as it is closely monitored. Compliance errors will result in your offer being returned, which is a way for the IRS to keep applications moving through the pipeline.

It is natural for a taxpayer who has submitted an offer in compromise to feel anxious or frustrated given the amount of time that passes between the submission of the offer and response by the IRS. The important thing to remember that so long as the IRS has acknowledged your offer application, they will get back with you and collections are on hold while you wait.


Quote mark image for testimonials

Alex was a pleasure to work with. He was very clear on what he needed from us and obviously worked closely with the federal government to resolve our issue. He has exceeded our expectations. Scott St. Louis, MO

Alex is an amazing attorney! I really had very little confidence in any attorney and in particular a tax attorney. From the first phone call Alex made me feel at ease and never made me feel embarrassed by letting my tax situation get out of control. He took all the stress away and I am thrilled to say also resolved all of my tax issues quickly. He has gone above and beyond. I would recommend Alex to everyone! Josephine St. Louis, MO

For no other reason than my own need to express my gratitude, I would like to sincerely say thank you to The Alexander Law Firm. Alex has gone above and beyond my expectations and has taken the weight of the world off of my shoulders. I will continue to recommend him to anyone that I know searching for a Tax Attorney even if that may be my Grandmother! Jeremy St. Louis, MO

I can’t begin to express how wonderful my experience with The Alexander Law Firm has been. I came to see Alex with my disabled sister who had a tangled mess of tax issues. A plan was proposed to remedy my sister’s complex tax issues and was put into place as planned. Alex was on top of all issues and was there to answer all my questions. I feel he went over and above the norm. His compassion was greatly appreciated while my sister and I navigated this difficult time. I will continue to retain Alex’s services in the future and would definately recommend him to friends and family. Many thanks. Peggy St. Louis, MO

I presented The Alexander Law Firm with an IRS problem which I felt to be unsolvable. They solved the problem beyond my expectations. I am quite happy with their work and highly recommend The Alexander Law Firm. Tom Columbia, MO

Alex exceeded my expectations in handling my IRS and state tax issues. He is courteous, efficient and gets results. I highly recommend The Alexander Law Firm. Martin St. Charles, MO

This was my first experience in being audited by the IRS. I was extremely nervous as I heard horror stories and didn’t know what to expect. Contacting Alex was the best decision I’ve made. He was precise, knowledgeable, always on top of things and most importantly, he was able to put me at ease. By following his directions and recommendations, I was able to gather all the information necessary for the IRS. Alex was able to lead the entire process smoothly and I ended up with a no charge result. I would highly recommend Alex to be on your side if you are dealing with the IRS. M.N. St. Louis, MO

All my expectations have been exceeded. [The] firm is very easy to work with and I am pleased how my case is going so far. I have no complaints, great service. Eric St. Louis, MO

I had called four tax law firms and left messages and the only law firm that called me back was The Alexander Law Firm. After speaking with Alex about my tax issues, he informed me of the fee and told me that he would be happy to help with my tax problem. Alex kept in contact with me throughout the entire experience. What took me four years, in trying to comply with the State of Missouri, Alex helped and wrapped up in a short amount of time. After all was said and done, he had gotten the state of Missouri to settle for a fraction of what they had said I owed them. I would definitely recommend The Alexander Law Firm to any of my family or friends. Stuart St. Louis, MO

Alex helped me sort out a complicated mix of problems with the IRS and the Sate of Missouri. He could not have been more knowledgeable. He built a clear plan, dealt effectively with all parties involved and helped me get things settled. His focus and calm demeanor made dealing with him a pleasure. I recommend him without reservation. Steve Ferguson, MO

Schedule a Consultation

Have any questions? Need help with your tax situation? We would love to hear from you!

Sign up for our free e-book

The IRS Does Not Just Go Away

Alexander Law Firm is a BBB Better Business Bureau Accredited Business Alexander Law Firm rated by Super Lawyers
Alexander Law Firm
St. Louis Office
St. Louis Map

5257 Shaw Ave, Suite 221
St. Louis, MO 63110
United States

P (314) 261-4111

© 2016 Alexander Law Firm. All Rights Reserved.