Washington (Oct. 23, 2003) -- Survey responses from CPAs nationwide indicate a majority of them believe that the Internal Revenue Service is shirking its commitment to the Offer In Compromise program.

The results were revealed in a letter from the American Institute of CPAs' Tax Executive Committee to Dale Hart, commissioner of the IRS Small Business/Self-Employed Division. In the letter, Robert Zarzar, chair of the committee, noted that despite stated policy and legislative provisions that call for more flexibility and greater ease for taxpayers to enter OIC agreements, IRS employees are not implementing the policy.

IRS employees at the new, centralized Offer in Compromise sites "might be reducing OIC inventory levels based on implementation of rigid procedures; tight rules regarding what constitutes a "processable" offer and short time frames for submitting updated or missing documents," charged Zarzar.

Another area of concern, Zarzar added, is that "many offers will not be reviewed until 9 to 12 months after the Form 656 was initially submitted; and then at that point, the IR OIC specialist will ask the taxpayer to resubmit new financial information because the information submitted with the initial Form 656is then viewed as dated."

The tax system would be better served, said Zarzar, "if SB/SE's Offer specialists evaluated Offers in a more open-minded and flexible manner, thereby leading to the acceptance of more original submissions."

-- WebCPA staff

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