OIC sent back because tax return not filed (although not required to be filed) - 20% initial deposit kept


An OIC was sent back because a tax return was not filed for one year. IRS kept the 20% down payment but returned the $186 application fee. The tax return was not filed by client because it was not required to be filed as taxpayer did not meet the income threshholds for filing. Can anything be done to get the IRS to reconsider or return the 20% down payment?

I spoke with multiple IRS agents and could not get an answer other than you have to file the return. We ended up submitting a new OIC with a lower offer amount, but it was frustrating to do it over.

Just wondering any thoughts on this. Also a reminder to make sure that all tax returns (even $0 returns) are filed before submitting an offer. Live and learn.


It’s always better to file a return (whether needed or not). That keeps everything in line and you don’t have to worry about someone else filling a fraudulent return. I usually have a reduced fee for my regular clients


There’s been a notification on the irs.gov website under offier-in-compromise that says begining March 27, 2017 the IRS will not work any OIC cases where all tax returns have not been filed. It’s been up there quite a while.