I wrote a post almost two years ago about the provision placed into IRC 7122(f) as part of the Tax Increase Prevention and Reconciliation Act of 2005, which deems a doubt as to liability and doubt as to collectability offers received by the IRS on or after July 16, 2006, accepted if the IRS does not act on the offer within two years. The prior post was prompted by a question I received from Scott Schumacher, my fellow clinician and now the associate dean at the University of Washington. Scott’s clinic had a case that appeared to cross the 24-month threshold, but they could find no manual provisions describing what happens when that occurs.
A recent internal guidance memo, SBSE-04-0117-0007, shows that the IRS is now thinking about this issue and developing internal controls to monitor the amount of time an offer is pending. The memo is short and establishes guidance for the IRS employees who process offers as they arrive. It allows practitioners to see what the IRS will do to mark the arrival of a new offer and the beginning of the two year time frame. When I posted on this issue previously, only one commenter mentioned having a case that went past the two year time period. If you have experienced an offer that aged into acceptance, please send in a comment to allow the community to gain a sense of whether this is happening. My research assistant searched the IRM to see if the IRS had published other guidance on this issue since the post two years ago and found a few pieces of information in the IRM. The Appeals OIC discussion does mention the two year rule; the OIC manual has a brief discussion of the rule at 18.104.22.168.1 (04-18-2016) and last April the director of collection policy issued a letter similar to the one linked above.
I had a conversation with an offer examiner recently who said that his group had gotten behind for a bit in completing the offers but was relatively caught up at this moment. Non-business offers seem to take about 4-6 months. Unless an offer slips through the cracks, it seems unlikely that it would reach the two year period. No doubt an occasional offer does slip through the cracks for what could be a nice reward at the end of a very long tunnel.