Offer in compromise rules tightened by IRS

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The Internal Revenue Service announced that Offer in Compromise applications received on or after March 27 will now be returned if the taxpayer has not filed all required returns.

In such cases, the application fee will be returned and any required initial payment submitted with the offer will be applied to outstanding tax debt.

This policy does not apply to current year tax returns if there is a valid extension on file.

This update is reflected on the Offer in Compromise page on and the updated Offer in Compromise Booklet (Form 656-B) available March 27.

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