IRS Tax Relief offer timing

The IRS offer page doesn't give an average or expected time, so be wary of anyone who promises you a date. What the IRS and the tax code do spell out is the longest it can take and what happens to your account in the meantime.

The two-year rule

The IRS offer page says your application is automatically approved if the IRS doesn't accept or reject it within two years. The two years start when the IRS receives the application, and time spent in an appeal doesn't count.

The rule comes from 26 U.S.C. 7122(f). It says an offer is deemed accepted if it isn't rejected within 24 months of submission, and it leaves out any period when a tax debt in the offer is being disputed in court.

Who can apply

If you apply and you're not eligible, the IRS returns your application and the fee and applies any payment you sent to your tax debt. To be eligible you must have filed all required tax returns, made required estimated tax payments, and not be in an open bankruptcy. Employers also need to have made their federal tax deposits for the current quarter and the two before it.

The IRS offer page links to a Pre-Qualifier tool that checks eligibility and helps you prepare a preliminary offer, and the IRS says taxpayers can check eligibility using IRS tools that do not charge a fee. Running it first can save you a returned application.

Once the IRS confirms you're eligible and processes the application, it sends you a notification. It may also ask for more information to finish its investigation, so keep copies of what you send.

What happens while you wait

According to the IRS offer page, once your application is processed:

• the IRS suspends most collection activity;
• the period the IRS has to collect the tax is extended;
• the IRS may file a notice of federal tax lien;
• you must keep making every required offer payment;
• you don't need to keep paying an existing payment plan for the same balance.

The payments depend on the option you chose. With a lump-sum offer you pay 20 percent of the offer amount when you apply, and if it's accepted you pay the rest in five or fewer payments. With a periodic payment offer you make the first payment when you apply and keep paying while the IRS considers it. If you meet the low-income qualifications, you don't pay the fee, the first payment, or periodic payments during the review.

When the IRS decides

If the offer is accepted, you have to meet the terms in Section 7 of Form 656 to keep it. The IRS won't release a federal tax lien until the offer is paid in full, and some of your offer information goes into a public inspection file.

If it's rejected, the $205 application fee isn't returned and any payments go toward your balance. You can appeal to the IRS Independent Office of Appeals.

Is an offer the right fit?

An offer in compromise may allow you to settle your tax debt for less than the full amount you owe if you can't pay in full or doing so would cause financial hardship. The IRS generally won't accept an offer if you can pay the debt in full through a payment plan, the equity in your assets, or both. When that describes you, a payment plan is the option to look at first. What to do when you owe the IRS and can't pay compares the options.

The IRS put aggressive offer marketing on its 2026 Dirty Dozen list, warning that "OIC mills" often overpromise results and charge high fees to people who don't qualify. How to choose a tax relief company lists the questions to ask before you pay anyone.

Can the IRS take my house? covers collection. For the letter itself, see what a CP14 notice means. The Spokane page covers what's different there.