Taxation & Estate Planning

How many offers in compromise does the IRS really accept?

By howardlevy

The IRS offer in compromise program has been promoted endlessly over the last several years. Turn on your television, open up the newspaper, or listen to the radio, and there it is.  

My clients usually are very interested in the compromise program, but the first thing I do is set them straight that this is not a “freebie” program.

The numbers speak for themselves.  Compare:

-     In 2001, the IRS accepted 38,643 offers.

-     In 2007, the IRS accepted 11,618 offers.  

That is a 70% decline.  Pretty significant.  

With over 2 million active balance due accounts in 2007, the IRS arguably should be as welcoming as the advertisements lead one to believe.    

Think about it:  2 million balance due accounts, 11,618 offers accepted.  

The reality is that this is anything but a “loose” program.  In certain situations it can be very helpful, but a hard analysis of income and expenses under the strict IRS financial guidelines is essential to success. 

Full post as published by IRS and the Law on November 17, 2008 (boomark / email).