The IRS has 24 months from the date it receives your Offer in Compromise to make a decision, though most decisions come faster

When you submit an Offer in Compromise (OIC) — a formal request to settle your tax debt for less than you owe — the IRS has a legal deadline of 24 months to accept, reject, or return your offer. This timeline starts the day the IRS receives your complete application, not the day you mail it. In practice, most offers are decided within 6 to 12 months, but the full 24-month window exists because the IRS reviews thousands of offers and prioritizes them based on the complexity of your case and current workload.

The actual time your offer takes depends on several factors: whether you included all required documents, whether the IRS needs to request additional information from you, and whether your case involves complications like pending litigation or multiple tax years. If the IRS asks you for more information and you do not respond within 30 days, they may return your offer as incomplete, which stops the clock and requires you to resubmit.

Key Takeaways

  • The IRS legally has 24 months from receipt of your complete offer to make a decision, though most are resolved in 6 to 12 months.
  • The timeline begins when the IRS receives your full application with all required documents, not when you submit it.
  • If the IRS requests additional information and you do not respond within 30 days, your offer may be returned as incomplete and the process restarts.
  • You can check the status of your pending offer by calling the IRS at 1-800-829-7650 and providing your case number.
  • While your offer is pending, the IRS typically does not pursue collection actions like wage garnishment or bank levies, though interest and penalties continue to accrue.

What Happens During the 24-Month Review Period

The IRS does not review all offers at the same speed. When your offer arrives at the IRS Offer in Compromise unit (usually in Memphis, Tennessee or Brookhaven, New York, depending on where you live), it is assigned to a revenue officer or settlement officer who examines your financial information, the amount you offered, and whether you have complied with recent tax filing requirements.

During this period, the IRS may request additional documents: recent pay stubs, bank statements, proof of living expenses, or clarification about assets you listed. You will receive a letter asking for these documents, and you typically have 30 days to respond. If you miss this deadline, the IRS will usually send a second notice giving you another 30 days. If you do not respond to the second notice, the IRS may return your offer as incomplete, which means you would need to resubmit the entire application to start the process over.

While your offer is under review, the IRS generally does not take collection actions like garnishing your wages or levying your bank account. However, interest and penalties on your original debt continue to accrue during this time. If your offer is eventually rejected, you will owe the original debt plus the additional interest and penalties that accumulated while the offer was pending.

How to Track Your Offer Status

You do not have to wait passively. You can contact the IRS to find out where your offer stands. Call the IRS at 1-800-829-7650 and have your case number ready — this was provided in the acknowledgment letter you received when the IRS first received your offer. The IRS representative can tell you whether your offer is still under review, whether additional information has been requested, or whether a decision has been made.

If you submitted your offer more than 12 months ago and have not heard anything, calling is especially useful. Sometimes offers get delayed due to staffing issues or because the IRS is waiting for a response to a document request that may not have reached you. A phone call can clarify whether the IRS is actually waiting for something from you or whether your case is simply moving through the queue.

What Happens If the IRS Needs More Information

Request letters from the IRS are common and do not mean your offer is in trouble. The IRS may ask for updated financial statements if several months have passed since you submitted your offer, or they may need clarification about specific line items on your Form 433-A (for individuals) or Form 433-B (for businesses). They might also ask for documentation of claimed expenses or proof that you own or do not own certain assets.

When you receive a request letter, respond within the deadline given — usually 30 days. Send your response by certified mail with return receipt so you have proof the IRS received it. Keep a copy for your records. If you cannot gather all the requested documents within 30 days, contact the IRS before the deadline expires and ask for an extension. The IRS will sometimes grant 30 additional days if you have a legitimate reason for the delay.

When the 24 Months Is About to End

If you are approaching the 24-month mark and have not received a decision, the IRS must make one before the deadline expires. In rare cases, the IRS and the taxpayer can agree in writing to extend the 24-month period, but this requires mutual consent and is not automatic. If the IRS does not issue a decision by month 24, your offer is considered accepted by operation of law — meaning it is approved, even if you have not received formal notice.

In practice, this rarely happens because the IRS tracks these deadlines carefully. However, if you reach the deadline without a decision and the IRS has not contacted you, send a letter to the IRS office handling your case referencing the 24-month deadline and requesting a decision. Include your case number and a copy of your original offer.

What Happens After the IRS Makes a Decision

Once the IRS decides on your offer, you will receive a formal letter. If your offer is accepted, the letter will specify the amount you owe and the payment terms — usually a lump sum within 30 days, though installment plans are sometimes offered. Once you pay, your tax debt is settled and the IRS closes your case.

If your offer is rejected, the letter will explain why. Common reasons include: your offer amount was too low based on your financial situation, you did not disclose all your assets, or you did not meet the IRS's criteria for settlement. You have 30 days from the date of the rejection letter to appeal the decision to the IRS Appeals Office, or you can submit a new offer with different financial information or a higher amount.

Frequently Asked Questions

Can the IRS extend the 24-month deadline?

Yes, but only if you and the IRS agree in writing to extend it. The IRS cannot unilaterally extend the deadline. If both parties agree, the extension is usually for a specific number of months and is documented in writing. If you think an extension is necessary, contact the revenue officer handling your case and request one in writing.

Does the 24 months include time when the IRS is waiting for my response?

The 24 months continues to run even while the IRS is waiting for you to send requested documents. However, if you do not respond and the IRS returns your offer as incomplete, the clock stops and restarts when you resubmit. The key is to respond to all IRS requests promptly to avoid delays.

What if I do not hear from the IRS after 20 months?

Call 1-800-829-7650 with your case number and ask for a status update. Do not assume silence means approval. The IRS may be waiting for information from you, or your case may be in the queue for final review. A phone call can clarify the situation and ensure you are not missing a deadline.

Can I withdraw my offer before the IRS decides?

Yes. You can withdraw your offer in writing at any time before the IRS makes a decision. Send a letter to the IRS office handling your case stating that you withdraw your offer. Once withdrawn, your original tax debt becomes immediately due, and the IRS may resume collection actions. Consider this carefully before withdrawing.

What happens to my debt while the offer is pending?

Interest and penalties continue to accrue on your original debt during the 24-month review period. The IRS typically does not pursue active collection (like wage garnishment or bank levies) while your offer is under review, but this is not may provide. If your offer is rejected, you will owe the original amount plus all accumulated interest and penalties.