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My Offer in Compromise Was Rejected by The IRS, Should I Just Pay the Debt in Full as Fast as I Can?

Michael S. Anderson Aug. 4, 2013

An IRS Offer in Compromise can be a great tool to reduce your tax debt. However, in order to make it work, you have to convince the IRS that you don't have enough income and assets to pay the debt off before the Statute of Limitations on collection runs out.

The fact that you may be able to pay the tax debt off quickly, leads me to believe that you may not have been a good Offer in Compromise candidate in the first place or that you didn't plan your case right.

If I had reviewed your financial situation before you filed it I may have told you that, or I may have found a few ways to legally increase your budget or deal with asset values so that you would have made a better Offer in Compromise candidate. I also may have suggested that you negotiate a payment plan while letting the clock continue to run out on the statute of limitations period, or discussed bankruptcy with you.

In any event, you are entitled to appeal the rejected Offer in Compromise if you do so within 30 days of the initial rejection. Doing this will buy the time to have an experienced tax attorney look at the entire situation and help you challenge the rejection or find another more viable method for dealing with the debt that may even include…paying it in full.