Overview

If the IRS rejects your Offer in Compromise (OIC), you have a limited window to seek review. Reviewing the rejection closely and building a targeted appeal can preserve settlement options and reduce collection risk. The IRS OIC page explains eligibility and appeal rights (IRS.gov).

Step-by-step appeal plan

  1. Read the rejection notice immediately
  • The notice explains why the OIC was denied and includes the deadline to appeal (typically 30 days). Note any addresses or contact names shown on the notice.
  1. Decide how to appeal
  • Most taxpayers use IRS Form 13711, Request for Appeal of Offer in Compromise. The rejection notice will tell you where to send the appeal. If you prefer, a written request that includes the same information may be accepted; follow the instructions on the notice and the IRS OIC guidance (IRS: Offer in Compromise).
  1. Gather the right documentation
  • Provide the missing or updated evidence cited in the rejection: current pay stubs, bank statements, proof of medical expenses, proof of job loss or reduced earnings, and asset valuations. If circumstances have changed since the original submission—such as new medical bills or lost income—document them clearly.
  • See our guide on preparing a complete reconsideration packet for the records the IRS wants to see: Preparing a Complete Offer in Compromise Reconsideration Packet.
  1. Explain the error or new facts concisely
  • In your appeal letter or on Form 13711, state why the IRS decision was incorrect or incomplete. Reference specific lines or calculations in the rejection notice and attach supporting documents. Keep explanations factual and organized.
  1. Confirm collection status and possible holds
  • Appeals do not always pause collection activity. Ask the IRS contact on your notice whether collection (levy or lien) will be suspended during the appeal. If immediate collection is threatening, discuss Collection Due Process (CDP) rights or other remedies with a tax professional or the Taxpayer Advocate Service.
  1. Consider alternatives while you appeal

What to expect and typical timeline

  • Timeline varies. Appeals can take several weeks to a few months depending on complexity and IRS workload. The IRS will notify you of the result and any revised payment terms. If your appeal is granted, you may receive an acceptance letter with payment instructions. If denied, the notice will explain further steps and whether reconsideration is possible.

If the appeal is denied again

  • You can request reconsideration if you have new facts or evidence that weren’t available at the time of the appeal. In my practice, providing updated income statements or documented medical expenses has often led to a successful reconsideration.

Practical tips from experience

  • Be timely: file within the deadline on the rejection notice; missing it can limit your options.
  • Be organized: label exhibits, include a brief table of contents, and reference each document in your explanation.
  • Address the main reason for denial first: if the IRS cited a calculation error or missing documentation, correct that before submitting large amounts of new information.
  • Consider professional help: a CPA, enrolled agent, or tax attorney can streamline the appeal and communicate with the IRS on your behalf.

Possible outcomes

  • Acceptance of the original or a modified offer.
  • Partial acceptance requiring revised payment terms.
  • Denial, followed by the option to request reconsideration or pursue alternative solutions (installment agreement, partial-payment offer, or insolvency/bankruptcy considerations).

Authoritative sources and where to file

Professional disclaimer

This article is educational and does not constitute legal or tax advice. For case-specific guidance, consult a licensed tax professional or tax attorney. In my 15 years helping taxpayers through OIC and appeal processes, I recommend acting quickly, documenting changes clearly, and bringing in professional representation when collection risk is high.