So many taxpayers are trying to make deals with Internal Revenue Service to settle tax bills that the IRS is facing inventory backlogs and processing delays, leaving taxpayers unsure “if or when their tax liabilities will be resolved,” according to a report released today by the Treasury Inspector General For Tax Administration, “Increasing Requests for Offers in Compromise Have Created Inventory Backlogs and Delayed Responses to Taxpayers.” Patience! The good news is that the IRS admits there is a problem.
The number of taxpayers requesting these deals—known as “offers in compromise”—jumped by 28% between fiscal year 2007 when it received 46,270 offers and fiscal year 2011 when it received 59,411 offers, the report says. Meanwhile, IRS resources to work out the offers decreased. Hence the backlog.