Appealing an Offer In Compromise Rejection

Why Offers Get Rejected

The IRS rejects roughly 60% of submitted Offers in Compromise. The most common rejection grounds: the offer falls below the IRS's calculated reasonable collection potential (RCP); the taxpayer wasn't compliant with current-year filings or estimated payments during the review period; the financial disclosure on Form 433-A(OIC) or 433-B(OIC) contained errors or inflated expenses outside Collection Financial Standards; or the taxpayer's offer wasn't in the IRS's best interest given asset profile and projected income.

Each rejection comes with a written explanation in the rejection letter. The letter cites which specific calculation produced the rejection — usually a higher RCP number than the offer amount — and the deadline for filing an appeal.

How to Appeal Through the IRS Office of Appeals

Form 13711, Request for Appeal of Offer in Compromise, must be filed within 30 days of the date on the rejection letter. The form lets you identify each contested issue in the rejection calculation, explain why you disagree, and provide supporting documentation. Once Form 13711 is filed, the case transfers from the OIC unit to the IRS Office of Appeals, and a different Appeals Officer reviews the file from scratch.

The most productive grounds for appeal: incorrect RCP calculation. Common errors include using quick-sale value rather than fair-market-quick-sale value where IRS policy allows the lower figure, treating retirement accounts that have penalty-on-withdrawal exposure at face value rather than net of penalty, valuing real estate at appraisal rather than the lower of quick-sale or appraisal, and ignoring secured debt that reduces equity available for collection. Each is a documented IRM (Internal Revenue Manual) procedure the original examiner may have skipped.

The Appeals Officer has settlement authority — meaning they can accept an offer at a lower amount than the original examiner could under hazards-of-litigation analysis. The standard is whether the IRS could win in court on the contested issue. If there's genuine doubt about the original RCP calculation, the Appeals Officer is authorized to settle at an intermediate amount rather than send the case back to collection.

Mediation is also available through the Fast Track Mediation Program for cases where the appeal involves valuation disputes that haven't reached impasse. Mediation produces a written settlement that becomes binding once both sides sign — faster than waiting for a full Appeals review.

Appealing an Offer in Compromise rejection can be a complex and time-consuming process, but with careful attention to detail, a thorough understanding of your case, and potentially professional guidance, you can increase your chances of achieving a favorable outcome and settling your tax debt with the IRS.

Remember that the appeal process is an opportunity to present your case and potentially have your OIC reconsidered. Seek professional assistance if you're unsure about how to navigate the appeals process effectively or if you believe there are compelling reasons for the IRS to reconsider your offer.

Frequently Asked Questions

What should I do if my Offer in Compromise (OIC) is rejected by the IRS?

Start by reading the rejection letter carefully, since it explains the IRS reasoning and your right to appeal. You generally have 30 days from the date of the letter to request an appeal with the IRS Independent Office of Appeals. Reviewing why the offer was rejected helps you decide whether to appeal, submit a revised offer, or pursue another resolution.

How do I initiate the appeal process for my OIC rejection?

You typically appeal a rejected offer by filing Form 13711, Request for Appeal of Offer in Compromise, within 30 days of the rejection letter. In it, you identify the items you disagree with and explain your reasons. Following the instructions in the rejection letter closely helps ensure your request is processed without unnecessary delay.

What should be included in my appeal request?

Your appeal should clearly identify each point you disagree with and explain why, supported by documentation such as financial records that address the IRS concerns. Citing the specific findings in the rejection letter and responding to each one makes your position easier to evaluate. Because the strength of an appeal often turns on the supporting evidence, many taxpayers consult a tax professional when preparing it.

Can I continue making payments during the appeal process?

Yes, and staying current on your tax obligations is generally important while an appeal is pending. Any payments already submitted with your offer are typically applied to your tax liability and are not refunded. Keeping up with required filings and payments also helps you remain eligible for collection alternatives.

What happens after I submit my appeal request?

Your case is forwarded to the IRS Independent Office of Appeals, where an Appeals Officer who was not involved in the original decision reviews it. The officer may contact you for additional information or to discuss the issues, often by phone or correspondence. After the review, you receive a determination explaining the outcome.

Can I represent myself during the appeal, or should I seek professional assistance?

You may handle the appeal yourself, or you can authorize an attorney, CPA, or enrolled agent to represent you before Appeals. Professional representation can be helpful when the financial issues are complex or the amount at stake is significant. The right choice depends on your comfort with the process and the specifics of your case.

How long does the appeal process typically take?

The length of an OIC appeal varies with the complexity of the case and the IRS workload, and it can take several months. Responding quickly to requests from the Appeals Officer and providing complete documentation can help avoid delays. There is no fixed timeline that applies to every case.

What if my appeal is successful?

If the appeal resolves in your favor, the IRS may accept your offer, often with agreed terms for paying the settled amount. You will then need to stay compliant with filing and payment requirements for a set period, typically five years, to keep the agreement in good standing. The specific terms are spelled out in the acceptance documents.

What if my appeal is not successful?

If your appeal is denied, the full tax liability generally remains due, and the IRS may resume collection efforts. You still have options such as an installment agreement, a new offer if your circumstances change, or, in some cases, Currently Not Collectible status. Discussing the outcome with a tax professional can help you identify the most practical next step.

Can I appeal an appeal decision?

Administrative appeal rights within the IRS are generally limited once the Independent Office of Appeals issues its determination. Depending on the type of case, you may be able to seek review in the U.S. Tax Court or pursue other judicial remedies. Because these options are governed by strict deadlines and procedures, it is worth consulting a tax attorney about whether further review is available.

Request a free consultation with our experts today and take the first step towards achieving your goals.

This content was written and reviewed by the licensed tax attorneys at Victory Tax Lawyers, LLP. Our attorneys specialize in IRS tax relief and are licensed members of the California State Bar with a nationwide practice.

Last Reviewed: 2026  ·  Meet Our Attorneys →

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