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.

Frequently Asked Questions

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

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

##### What should be included in my appeal request?

##### Can I continue making payments during the appeal process?

##### What happens after I submit my appeal request?

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

##### How long does the appeal process typically take?

##### What if my appeal is successful?

##### What if my appeal is not successful?

##### Can I appeal an appeal decision?

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.

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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