how long does it usually take for the IRS to process (and hopefully accept) the initial offer in compromise?

Answer 1

daisy's, we just had one accepted a few days ago that took about four months from the time we submitted it. Some are longer, some are much longer. On average, I would say about 6 months, but it depends on a couple of factors.

The first is whether the case is going to be handled by one of the two big Offer groups located in Memphis and Holtsville, NY. The vast majority of cases are handled there. More complex cases, including all those where the taxpayer has employees are handled by Revenue Officers.

Those cases that are handled by Revenue Officers (RO's) will always take longer because there is far more information to review. You may also find that you have to give the same information more than once because the initial information has become stale. It's a monumental pain in the rump, but there isn't much you can do about it.

Remember that the process IS a negotiation and you could end up in Appeals as well. If you choose to hire a tax professional, make sure you ONLY hire one that is legally licensed to represent taxpayers. That means Enrolled Agents, CPAs and attorneys. Don't hire anyone unless you can talk with a licensed professional BEFORE you part with your money.

Answer 2

Each application stands on its own. I've heard of some that took over 2 years to process, only to be denied in the end.

Answer 3

If not accepted within 2 years, it automatically becomes accepted.

They say "NO" over 80% of the time.