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BulldogTom

Will IRS process OIC paperwork during the shutdown?

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I have a client who just sent in his OIC paperwork.   Will the IRS even look at it during the shutdown?   Can't find any definitive answer on that interweb thingy called google.

Tom
Modesto, CA

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My client called regarding a letter she received, and the IRS was "closed" due to the government shut-down. I don't think they are doing anything! 

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1 hour ago, Possi said:

My client called regarding a letter she received, and the IRS was "closed" due to the government shut-down. I don't think they are doing anything! 

I agree with Possi.  Unfortunately, your client's paper work will be put in/on/under a big stack.  Good luck as to the time it will be processed.

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Here is what will continue to be done :

 

  • Completion and testing of the upcoming tax-filing year programs
  • Electronic returns that are processed systemically (requiring no intervention by service center functions) up to the point of refunds
  • Processing paper tax returns through batching
  • Processing remittances
  • Processing disaster relief transcripts
  • Continuing the IRS' computer operations to prevent the loss of data
  • Protection of statute expiration, bankruptcy, liens and seizure cases
  • Upcoming tax year forms design and printing
  • Maintaining minimum staff necessary to perform accounting functions and to prevent the loss of accounting data
  • Maintaining criminal law enforcement and undercover operation

Here is what has been halted:

 

  • Service center processing after the point of return batching
  • Issuing refunds
  • Processing non-disaster relief transcripts, Income Verification Express Service/Return and Income Verification Services
  • Processing 1040X amended returns
  • All audit functions, examination of returns, and processing of non-electronic tax returns that do not include remittances
  • Non-automated collections
  • Taxpayer services such as responding to taxpayer questions (call sites, during non-filing season)
  • Information systems functions (except as necessary to prevent loss of data in process and revenue collections

Supposedly this will be subject to change the longer the shutdown drags on.

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Article from JoA: https://www.journalofaccountancy.com/news/2018/dec/irs-operations-government-shutdown-201820331.html

 

The article above also included this link to the complete and extensive document from treasury.gov of the IRS contingency plan document related to shutdown that was in effect through 12/31/18. Article states that IRS would have to redetermine what would happen after 12/31/18.   Might be easiest to search for keywords such as "Offer" or "Compromise" using Ctrl-F.   https://home.treasury.gov/system/files/266/IRS-Lapse-in-Appropriations-Contingency-Plan_Nonfiling-Season_2018-12-03.pdf

Edited by jklcpa
clarified doc covers only through 12/31
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I don't think I have ever had an OIC that took less than 6 months to be processed.  Some have taken several months longer.  So what is a few more weeks?  I always tell my clients 6 to 8 months if it is an individual,  and 8 to 12 months if it is a business, or Sch C.  

 

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22 hours ago, Max W said:

I don't think I have ever had an OIC that took less than 6 months to be processed.  Some have taken several months longer.  So what is a few more weeks?  I always tell my clients 6 to 8 months if it is an individual,  and 8 to 12 months if it is a business, or Sch C.  

 

It is not that Max.   My client is also under an installment agreement.   As soon as the IRS OIC office gets the paperwork, the Installment Agreement department gets notified and everything stops, including my client's payments on the IA (because they are now making payments on the OIC).   If the OIC people don't tell the IA people, the IA people may default the IA for failure to make payments.   And of course the client cannot afford to make both the OIC and IA payments.

Tom
Modesto, CA

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BD Tom, your question was abut processing.  But you are really asking about the acknowledgment of receipt.  That is when collections stops.  That normally takes about 10  days after mailing the OIC.  But under the current circumstances- who knows.

If the client is making the 24 month installment offer, I would wait until the ack. of receipt letter is received and then resume the offer payments.  That way the client won't be making double payments.

If it is a lump sum payment offer, then there is only the 20% deposit with the offer. 

 

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Yeah, I guess I phrased that badly.   What I want to know is when it is safe for the client to stop paying on the IA.

I wonder if I call Brookhaven if they will even answer the phones.

Tom
Modesto, CA

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It will be safe when the OIC section sends a letter acknowledging receipt of the the offer.

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