Appeal Your Rejected Offer in Compromise (OIC)

If you received a letter notifying you that the IRS rejected your offer, you have 30 days from the date of the OIC rejection letter to request an appeal of the decision. If it's been more than 30 days from the date of the rejection letter, your appeal won't be accepted. Remember to mail your appeal to the office that sent you the rejection letter.

You can request an Appeals conference by preparing either a Form 13711, Request for Appeal of Offer in Compromise (PDF), or a separate letter with the following information:

  • Name, address, Tax Identification Number and daytime telephone number
  • A statement that you want to appeal the IRS rejection to the IRS Independent Office of Appeals
  • A copy of your rejected offer letter
  • Tax period(s) or year(s) involved
  • A list of the specific items you don't agree with and a statement of why you don't agree with each item
  • Any additional information you want Appeals to consider
  • The facts supporting your position on any issue that you do not agree with
  • The law or authority, if any, on which you are relying and
  • Your signature on the written protest, stating that under penalties of perjury, it is true, correct and complete

Businesses

To determine whether you wish to request an appeal, if you are a corporation, S corporation, partnership, exempt organization, limited liability company (LLC) defined as a corporation or other LLC you should gather and review the following:

For information on what to include in your appeal request, refer to Publication 5, Your Appeal Rights and How to Prepare a Protest if you Don't Agree (PDF) and Publication 4227, Overview of the Appeals Process Brochure (PDF).

Individuals – Wage Earners and Self-Employed

To determine whether you wish to request an appeal, you should gather and review the following:

Your reasons for disagreement

In deciding whether to request an appeal, identify your specific items of disagreement by comparing the figures on your Form 433-A to the figures on your:

  • Income/Expense Table (IET) Worksheet and/or
  • Asset/Equity Table (AET) Worksheet

If you don't have your Form 433-A, IET Worksheet or AET Worksheet, contact the person identified on the rejection letter for these documents.

In considering your reasons for disagreement, make sure you address each of the reasons that apply.

For each area where you have a disagreement, you'll need to provide documents to support the income item, expense item and/or asset value you dispute. Refer to Section 10, Form 656-B, Offer in Compromise (PDF) for a list of supporting documents and to "Kinds of Records to Keep" in Publication 17, Your Federal Income Tax (PDF) for further information.

This reason without a specific explanation will not help Appeals reconsider your offer in compromise. Please consider explaining your reasons, as shown below.

To determine the amount in dispute, you’ll need your Form 433-A and the Income/Expense Table (IET) Worksheet.

  • Identify the amount you used for income from wages, interest, dividends, pensions, Social Security income, child support and other income on page 4 of your Form 433-A.
  • Identify the amount shown for these items on the IET Worksheet.
  • Compare these amounts:  If the amounts from the IET worksheet for these income items are more than the amount from the Form 433-A for any item, then you may have a disputed item and may consider filing a request for an appeal.

To determine the amount in dispute, you’ll need your Form 433-A, the Income/Expense Table (IET) Worksheet and the National Standards for Food, Clothing and Other Items.

  • Identify the amount you used for "food, clothing, and miscellaneous" from line 33 on page 4 of your Form 433-A.
  • Identify the amount shown for the national standard expense from the IET Worksheet.
  • Compare these amounts:  If the amount from the IET Worksheet is less than the amount from line 33 on page 4 of your Form 433-A, then refer to the National Standards for Food, Clothing and Other Items.
  • Identify the amount from the National Standards for Food, Clothing and Other Items that applies to you based on your family size and income.
  • Compare that amount to the amount from the IET Worksheet: If the IET Worksheet amount is less than the National Standards for Food, Clothing and Other Items, then you have a disputed item and may consider filing a request for an appeal.
  • Compare the amount from line 33 on page 4 of your Form 433-A to the national standard: If the amount from line 33 is more than the National Standards for Food, Clothing and Other Items amount, then you may appeal. 

This allowable expense is for health care costs that extend beyond health insurance. The allowable expense for health insurance is on line 38 of page 4 of your Form 433-A

  • To determine the amount in dispute,  you’ll need your Form 433-A, the Income/Expense Table (IET) Worksheet and the National Standards: Out-of-Pocket Health Care.
  • Identify the amount you used for out-of-pocket health care costs found on line 39 on page 4 of your Form 433-A.
  • Identify the amount shown for out-of-pocket health care costs from the IET Worksheet you received.
  • Compare these amounts:  If the amount from the IET Worksheet is less than the amount from line 39 on page 4 of your Form 433-A, then refer to the National Standards: Out-of-Pocket Health Care.
  • Identify the amount from the National Standards: Out-of-Pocket Health Care that applies to you based on your age.
  • Compare this amount to the amount from the IET Worksheet: If the IET Worksheet amount is less than the out-of-pocket health care standard, then you have a disputed item and may consider filing a request for an appeal.

  • Compare the amount from line 39 on page 4 of your Form 433-A to the National Standards: Out-of-Pocket Health Care: If the amount from line 39 is more than the out-of-pocket health care standard, then you may appeal. 

To determine the amount in dispute, you’ll need your Form 433-A, the Income/Expense Table (IET) Worksheet and the Local Standards: Housing and Utilities.

  • Identify the amount you used for housing and utilities found on line 34 on page 4 of your Form 433-A.
  • Identify the amount shown for housing and utilities from the IET Worksheet you received.
  • Compare these amounts:  If the amount from the IET Worksheet is less than the amount from line 34 on page 4 of your Form 433-A, then refer to the Local Standards: Housing and Utilities.
  • Identify the amount from the Local Standards: Housing and Utilities that is for the state and county where you reside and for your family size.
  • Compare the housing and utilities allowance amount to the amount from the IET Worksheet for housing and utilities. If the IET Worksheet amount is less than the housing and utilities allowance, then you have a disputed item and may consider filing a request for an appeal.
  • Compare the amount from line 34 on page 4 of your Form 433-A to the amount you identified from the Local Standards: Housing and Utilities. If the amount from line 34 is more than the housing and utilities allowance, then you may appeal. 

To determine the amount in dispute, you’ll need your Form 433-A, the Income/Expense Table (IET) Worksheet and the Local Standards: Transportation information.

  • Identify the amount you used for transportation expense on lines 35 and 36 of page 4 of your Form 433-A. This includes ownership and operating costs.
  • Identify the amount shown for transportation expense from the IET Worksheet you received.
  • Compare these amounts:  If the amount from the IET Worksheet is less than the amount from lines 35 and 36 of page 4 of your Form 433-A, then refer to the Local Standards: Transportation.
  • Identify the allowable amount of ownership costs based on the number of vehicles you own and the operating costs based on the region you reside and number of vehicles from the Local Standards: Transportation.
  • Compare the Local Standards: Transportation amount to the amount from the IET Worksheet for transportation. If the IET Worksheet amount is less than Local Standards: Transportation amount, then you have a disputed item and may consider filing a request for an appeal.
  • Compare the amount from lines 35 and 36 of page 4 of your Form 433-A to the amount you identified from the Local Standards: Transportation. If the amount from the Form 433-A is more than the standard transportation expense, then you may appeal. 

To determine the amount in dispute, you’ll need your Form 433-A and the Income/Expense Table (IET) Worksheet.

  • Identify the amount you used for taxes, child/dependent care, life insurance or other expenses from page 4 of your Form 433-A.
  • Identify the amount for these items from the IET Worksheet you received.
  • Compare these amounts:  If the amount from the IET Worksheet for any of these items is less than the amount from your Form 433-A, then you may have a disputed item and may consider filing a request for an appeal.

To determine the amount in dispute, you’ll need your Form 433-A and the Asset/Equity Table (AET) Worksheet.

  • Identify the amount you used for asset value and the loan value of each vehicle on page 3 of your Form 433-A.
  • Identify the value of the vehicle and the encumbrance (amount owed) identified on the AET Worksheet for each vehicle.
  • Compare these amounts: If the net amount from the AET worksheet for any vehicle is more than the amount from Form 433-A, then you may have a disputed item and may consider filing a request for an appeal.
  • Compute the value of your vehicle.
    • Determine the Fair Market Value (FMV) by consulting a trade association guide, advertisements from local dealers, classified ads and authoritative websites offering new and used car appraisals.
    • Determine the quick sale value by reducing the FMV value by 20%. This is the amount you can sell the vehicle for today.
    • On your most recent loan statement(s), compare the amount owed to the loan amount identified on the AET Worksheet.

To determine the amount in dispute, you’ll need your Form 433-A and the Asset/Equity Table (AET) Worksheet.

  • Identify the amount you used for asset value and the current mortgage balance(s) for each piece of real estate on page 3 of your Form 433-A.
  • For each piece of real estate, identify the value of the real estate and the current mortgage balance(s) (encumbrance) shown on the AET Worksheet.
  • Compare these amounts: If the net amount for real estate from the AET worksheet is more than the amount from Form 433-A, then you may have a disputed item and may consider filing a request for an appeal.
  • Provide documentation on the Fair Market Value (FMV) for each piece of real estate. The encumbrance (mortgage) is the loan payoff amount as it appears on a current statement of the lender. The net equity in real estate is the FMV reduced by the current mortgage balance.

To determine the amount in dispute, you’ll need your Form 433-A and the Asset/Equity Table (AET) Worksheet.

  • Identify the amounts you entered for banking, investment, cash, credit or life insurance on page 2 of your Form 433-A.
  • Identify the amounts for these items on the AET Worksheet.
  • Compare these amounts: If the amount from the AET worksheet for any of these assets is more than the amount you entered on your Form 433-A, then you may have a disputed item and may consider filing a request for an appeal.

You were asked to explain your special circumstances in Section 3 of Form 656, Offer in Compromise (PDF). If you believe you have special circumstances, but you didn’t explain them on your Form 656, the IRS may not have considered your special circumstance.

If you are either certain you have a special circumstance or are unsure, you may want to consider filing your request for an appeal. You should identify your special circumstance in the appeal and provide documents to support your special circumstances.

If none of the above reasons meet your situation and you need help, contact the person whose name is on the OIC rejection letter, refer to What is an Offer in Compromise? or call the IRS toll-free 800-829-1040 (TTY/TDD users may call 800-829-4059). Remember: you have 30 days from the date of the rejection letter to file your request for an appeal.