Decision Timeline: How long until the IRS makes a Decision on my Offer in Compromise
Question: I have filed an offer in compromise and want to know what the average time is for the IRS to approve my offer in compromise and finalize the process.
Answer: I’m glad that you have filed your offer in compromise and taken the first step towards resolving your tax problems with the IRS. The time for an offer in compromise to be resolved varies from case to case, but is generally a pretty long process. The typical offer in compromise takes about 9 months to complete. This includes the time it is being examined and potentially an appeal should your offer in compromise not be accepted the first go around.
Usually, after you file your offer in compromise it will take about a month for the IRS to send you a letter that states the IRS has received your offer in compromise and is going to be assigned to an offer examiner for review. About 30 days after that you will receive a letter from the offer examiner requesting more information or clarification on the information that you sent the first time. After that, the time will depend on the complexity of the issues in your case and whether you are asking the IRS to depart from any standard expenses or to overlook any assets to grant your offer in compromise.
Sometimes having the extra time comes in handy when you are having to wait on documents from a bank or mortgage company to send to the IRS, but on the other hand it can be kind of frustrating when you are just really ready to get the case over.
While there is no real time table in place for the review of your offer in compromise a law that went into effect in 2006 requires the IRS to finalize the review of your offer in compromise within two years of your filing the offer in compromise or the offer is automatically accepted. While many cases take a long time (well over a year) to complete, I have never had get accepted because the two years passed.