An OIC isn’t considered rejected until the IRS issues written notice of the rejection (Rev. Proc. 2003-71)., Written notice to the taxpayer must be “prompt.”

An offer can’t be rejected until an independent administrative review of the proposed rejection is complete.

The taxpayer can ask for a meeting to discuss acceptable alternative solutions with the office handling a rejected offer., If no agreement is reached at this meeting, the taxpayer has 30 days to file a protest with appeals.

In rejecting an offer, the IRS will also notify the taxpayer by mail, giving the taxpayer a reason for the rejection., They will not return the application fee., However, the taxpayer has a right to appeal the rejection or submit another offer (and another application fee).

If the IRS accepts the taxpayer’s offer, they send written notice of this decision by mail., Prompt payment and compliance with offer terms by the taxpayer are needed to prevent default on the offer., Once the payment terms are met by the taxpayer, the IRS will release all Notices of Federal Tax Lien against the taxpayer.

If an offer involving more than $50,000 is accepted, a written opinion of the IRS Chief Counsel is required., The opinion includes the reason for acceptance, the amount of tax, interest, and penalties assessed, and the amount to be paid according to the terms of the compromise.

Accepted offers in compromise become public information.

If an offer is not withdrawn, returned or rejected within 24 months of the submission date, it is deemed to be accepted. Time periods during which a liability included in the offer is the subject of a dispute in court proceedings will be disregarded by the IRS when calculating the 24-month time frame.