My Offer in Compromise was Accepted, but I still Receive IRS Collection Notices
Question: The IRS accepted an offer in compromise for my tax liability last year and I paid it in full before the end of the deadline. I received a letter that stated my offer in compromise was paid. Since then, I have filed my returns on time and kept up with my estimated payments so I wouldn’t get in any more trouble. Last week, I received an “Urgent” letter from the IRS about taxes that I owe for one of the years that was included in my offer in compromise. What do I do?
Answer: I would recommend two potential courses of action for you since your offer in compromise was accepted. First, I would send a letter to the IRS office that sent you the Urgent notice stating that their records are inaccurate and they accepted an offer in compromise for this tax year. I would also enclose a copy of the offer in compromise acceptance letter.
Next, if you continue to receive collection letters from the IRS for this tax period or others that were included in the offer in compromise, you should write a letter to the taxpayer advocate service basically telling them the same things: you had an offer in compromise accepted, you have a letter that says so, you have a letter that says you paid the offer in compromise in full and you would like the taxpayer advocate to help you to get the IRS to correct their records.
A lot of times, the letters are automated, so it may be that the IRS records are just in limbo and have not been updated yet. So if you continue to receive letters, you should definitely take action so the IRS doesn’t accidentally levy your wages or take some other collection action that could be harmful to you.
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