Tax Relief Solutions
Common Reasons for OIC Rejection
Why Did Your Offer in Compromise Get Denied?
Hi, I’m Keith Jones, CPA, and I specialize in helping taxpayers navigate the complexities of tax debt and find effective solutions. One option many taxpayers pursue is an Offer in Compromise (OIC) — a program that allows you to settle your tax debt for less than the full amount you owe. However, not every application is accepted by the IRS. If your OIC was denied, you’re not alone, and understanding why it happened is the first step toward resolving the issue.
Common Reasons for OIC Rejection
Failure to Meet Eligibility Requirements The IRS has strict guidelines for OIC eligibility. If you haven’t filed all required tax returns, aren’t current on estimated tax payments, or haven’t made necessary federal tax deposits (for business owners), your application may be automatically denied.
Inaccurate or Incomplete Application Submitting an OIC requires meticulous attention to detail. Missing forms, incomplete financial disclosures, or incorrect calculations can lead to rejection. The IRS needs a clear and accurate picture of your financial situation to evaluate your offer.
Unrealistic Offer Amount The IRS assesses your “reasonable collection potential” (RCP) to determine whether your offer is acceptable. If your proposed amount is significantly lower than what the IRS believes it can collect from your assets and future income, your offer will likely be rejected.
Insufficient Documentation The IRS requires extensive documentation to support your claims of financial hardship. If you fail to provide adequate proof, such as bank statements, pay stubs, or expense records, your application may not be approved.
Doubt as to Collectibility Not Proven OIC applications based on “doubt as to collectibility” must demonstrate that paying the full tax debt is not feasible given your financial circumstances. If the IRS determines that you can pay the debt through other means, your application will be denied.
Steps to Take After an OIC Denial
Review the Rejection Letter The IRS will provide a detailed explanation of why your offer was denied. Carefully review this letter to understand the specific reasons for the decision.
Appeal the Decision If you believe your OIC was wrongly denied, you have the right to appeal. File a request for appeal using IRS Form 13711 (Request for Appeal of Offer in Compromise).
Correct and Resubmit Your Application Identify and address the issues that led to the rejection. Ensure that your application is complete, accurate, and supported by all necessary documentation before resubmitting.
Explore Alternative Resolution Options If an OIC isn’t viable, consider other tax resolution strategies, such as installment agreements, partial payment plans, or seeking "Currently Not Collectible" status.
How I Can Help
Dealing with tax debt and a rejected OIC can be overwhelming, but you don’t have to face it alone. With decades of experience as a CPA, I specialize in helping stressed taxpayers resolve their tax issues efficiently and effectively. I can:
- Analyze your rejection letter and determine the best course of action.
- Help you prepare a stronger OIC application.
- Explore alternative strategies to reduce your tax debt.
- Guide you through the appeals process, if necessary.
Let’s Resolve Your Tax Debt Together
A rejected Offer in Compromise doesn’t have to be the end of the road. With the right guidance and a proactive approach, you can still achieve financial relief. If you’re feeling stuck or unsure of your next steps, reach out today. I’m here to help you navigate this challenging process and find the best solution for your tax situation.
🔗www.KeithJones.CPA 📞Toll Free Across Our Great Nation 844-888-1040! 📅Book a No-Cost Obligation Tax Debt Settlement Analysis👇 https://keithjones.cpa/booking-appointment-with-irs-tax-relief-expert/
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