Case: Return of OIC by IRS Appeals Stops ‘Deemed Acceptance’ Clock (T.C.) (IRC §7122)

An offer in compromise is rejected by the IRS when returned to the taxpayer, not when a future notice of determination is issued that could exceed the 24-month period for “deemed acceptance” under I.R.C. §7122(f), the U.S. Tax Court held in a division opinion. Additionally, the time during which the IRS Appeals Office in a CDP case reviews the return of an OIC is not included as part of the “deemed acceptance” period, the court concluded. Taxpayer had an outstanding tax liability for which he requested a CDP hearing. During the hearing Taxpayer submitted an OIC. Seven months later, the ...