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This
is a letter to the editor regarding the article about Offers in Compromise in
the July/August 2003 issue of the EA Journal. In 2002, I retired from the IRS where I was an
Offer in
Compromise (OIC) Specialist during the last 11 years of my career.
Now, I have the “pleasure” of dealing with the IRS as a POA for
clients for whom I have submitted offers.
The title of the article is how to submit a successful, i.e., accepted offer,
but most of the content is how to submit a processible offer and avoid having it
returned by the IRS’s Centralized OIC units (Holtsville, NY and Memphis, TN).
The other half of the battle is offering an acceptable amount which you
determine by using the IRS’s OIC criteria in an analysis of your client’s
assets, liabilities, income, and expenses. Nevertheless, the author did a great service to NAEA members by
emphasizing the magnitude of the problem of non-processible and returned offers,
as indicated by these statistics from the Holtsville Centralized OIC unit for
FYE 9-30-02:
Not
Processible: 31,701 (taxpayer
not current, in bankruptcy, etc.)
Accepted: 2,739
Rejected: 2,518
Returned: 24,527 (taxpayer fails to provide all information)
Withdrawn: 2,671
Total
Dispositions: 64,156
Anyone who does the math would conclude that 87% of the offers handled at Holtsville
are not processible or returned, and only 4% were accepted. It’s bad, but not actually that bad.
The Centralized OIC Units initially review all offers submitted to the
IRS and work the less difficult ones (offers by wage earners).
Higher difficulty offers, e.g., ones submitted by business entity
taxpayers, are sent to field OIC Specialists for disposition.
The above stats include neither the total OIC receipts at Holtsville nor
the number of offers transferred to the field.
Out of an undisclosed number of total receipts, 31,707 were not
processible. The other dispositions
totaling 32,455 were offers worked by the Holtsville center, and of these, only
8% were accepted and 75% were returned.
Sincerely,
Michael
L. Davis, EA
Georgia
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