Congress tries to change the IRS Offer in Compromise program.(Internal Revenue Service)(Brief article)

Earlier this year, Congress attempted to enact a proposal as part of the Transportation Bill that would have modified the IRS Offer in Compromise (OIC) program. However, the provision was stricken from the final version of the Transportation Bill that passed the Congress just prior to its August adjournment. Nevertheless, this proposal may be considered for addition to other legislation that is pending in the Congress.

In a nutshell, the proposal modifies OIC submissions to include a non-refundable 20 percent down payment and monthly installments (also non-refundable) during the time the offer is under consideration by IRS. NSA believes that it would effectively kill the OIC program by eliminating any incentive for "lenders of last resort, such as family members."

This proposal has been put forth to a large degree to put a final stake in the heart of the OIC program and further reduce the applications that IRS receives, mostly for the wrong reason. Requiring a taxpayer to make payments while consideration of an OIC languishes with the IRS and the statute is suspended almost smacks of double jeopardy. The taxpayer makes the payments with the hope of resolution but the IRS fails to grant resolution. It has received the non-refundable deposit and has collected payments, in many cases while the statute stood still. NSA firmly believes this legislative proposal is meant to kill only the most basic of offers and deny to most taxpayers access to a statutory right they currently have. Accordingly, NSA will oppose any attempt to include this proposal in future legislation.

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