IRS Changes Offer in Compromise Application Rules

Chris Gaetano
Published Date:
Mar 20, 2017

Those seeking an Offer in Compromise from the IRS should be aware of a recent rule change that could result in their application being returned, according to a recent update on the IRS website. Starting March 27, 2017, the IRS will return any newly filed Offer in Compromise application if you have not filed all required tax returns. Any application fee included with the OIC will also be returned. Any initial payment required with the returned application will be applied to reduce your balance due. This policy does not apply to current year tax returns if there is a valid extension on file.

The IRS has also issued a warning saying that, as the tax deadline approaches, scams targeting last-minute filers have increased. It noted that a new scam has begun circulating where a tax preparer is contacted by someone posing as a client asking to make a last-minute change to their refund destination, often as a prepaid debit card. The IRS urged tax preparers to verbally reconfirm information with the client should they receive last-minute email request to change an address or direct deposit account for refunds.

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