IRS Form 14773 Guide: Offer in Compromise Withdrawal Rules

1. Introduction: What is Form 14773?

IRS Form 14773, titled Offer in Compromise Withdrawal, is an official administrative document published by the Internal Revenue Service (IRS). It is governed by the IRS Small Business/Self-Employed (SB/SE) Collection division and the IRS Independent Office of Appeals under the authority of Internal Revenue Code Section 7122.

This form is used by taxpayers who have submitted a formal Offer in Compromise (OIC) using Form 656 or Form 656-L to settle their outstanding tax debt for less than the full amount owed, but later decide to cancel the request. Form 14773 serves as the official written statement notifying the IRS that the taxpayer is voluntarily withdrawing their pending offer before the agency makes a final determination.

2. Purpose of the Form: Why Does Form 14773 Exist?

When an individual or business submits an Offer in Compromise, the evaluation process can take anywhere from six months to over a year. During that review window, a taxpayer’s personal or financial circumstances may shift dramatically, making the original compromise proposal impractical or disadvantageous.

Form 14773 exists to provide an orderly, legally binding mechanism to terminate a pending offer. It resolves several critical procedural matters for both the taxpayer and the IRS:

• Ending the Offer Evaluation: It formally stops the IRS from continuing its deep-dive financial investigation into the taxpayer’s bank accounts, business assets, and monthly living expenses.
• Restarting the Collection Statute of Limitations: Under federal law, submitting an OIC legally freezes (tolls) the 10-year statutory time limit the IRS has to collect back taxes (known as the Collection Statute Expiration Date, or CSED). Withdrawing the offer ends this freeze and restarts the 10-year clock.
• Transitioning to Other Relief Programs: It allows taxpayers whose financial situation has improved or deteriorated to exit the OIC process and pivot to alternative solutions, such as an installment agreement, Currently Not Collectible (CNC) hardship status, or bankruptcy.

3. Who Needs to File This Form?

Form 14773 is filed exclusively by taxpayers who currently have an active, pending offer under review. You should file this form if you meet the following criteria:

• You or your business previously submitted an Offer in Compromise using Form 656 (based on Doubt as to Collectibility or Effective Tax Administration) or Form 656-L (based on Doubt as to Liability).
• The IRS has acknowledged receipt of your offer, and the case remains open with an IRS offer examiner or Appeals officer.
• You have decided for financial, legal, or strategic reasons that you no longer want the IRS to approve the proposed settlement amount.
• You are willing to accept the legal consequences of withdrawal, including the forfeiture of appeal rights and non-refundable fees.

4. Who Is Exempt / Not Required to File?

Form 14773 is completely inapplicable under several common scenarios:

• Offers Already Accepted or Rejected: If the IRS has already mailed you a formal letter accepting your compromise or formally rejecting it, your offer is no longer pending and cannot be withdrawn.
• Offers Returned by the IRS: If the IRS returned your offer without evaluation because you failed to pay the initial fee or missed basic filing requirements, the offer is already closed.
• Taxpayers Who Never Filed an OIC: General taxpayers resolving routine tax debts through monthly payment plans have no reason to use this form.
• Verbal Withdrawals: Under the Internal Revenue Manual, taxpayers may withdraw a pending offer verbally over the telephone with their assigned examiner. However, the IRS strongly encourages submitting written documentation using Form 14773 to prevent misunderstandings.

5. When to File: Deadlines and Frequency

Form 14773 is an event-based document rather than an annual recurring filing. You can submit it at any point while your Offer in Compromise is officially pending, up until the moment an IRS authorized official signs an acceptance letter.

The effective legal date of the withdrawal depends entirely on how the form is delivered to the IRS:

• Certified Mail: The withdrawal is legally effective on the date the IRS physically receives the certified mail.
• Personal Delivery: The withdrawal is effective on the date hand-delivered to an IRS office or revenue officer.
• Regular Mail, Fax, or Secure Messaging: The withdrawal is not legally effective until the date the IRS mails or sends a formal written letter acknowledging the withdrawal.

6. Where and How to File

Form 14773 must be routed directly to the specific IRS unit currently handling your open offer rather than a general processing center:

• Direct Delivery to the Examiner: If your case has been assigned to a specific OIC examiner or revenue officer, send Form 14773 directly to that individual via secure fax or tracked mail.
• Centralized OIC Processing Centers: If your offer is still undergoing preliminary intake review, mail the form via certified mail with return receipt requested to the centralized IRS address as per instructions provided in your initial OIC acknowledgment letter.
• Appeals Cases: If your offer was rejected and you are currently appealing that decision, send the withdrawal directly to the assigned Appeals Officer at the IRS Independent Office of Appeals.

7. Step-by-Step Instructions to Fill Form 14773

Form 14773 is a concise, single-page declaration. While brief, every entry must be filled out accurately to ensure the IRS links the withdrawal to the correct case file. The table below outlines each primary section.

Field / Section	Item Name	Required Information & Legal Effect
Header	Offer Number	The unique multi-digit tracking number assigned by the IRS to your pending offer.
Header	Taxpayer Name(s)	Full legal name of the taxpayer (and spouse, if a joint offer was submitted).
Body	Offer Date	The original date you executed and submitted your Form 656 or Form 656-L.
Terms	Statutory Acknowledgments	Acknowledgment that appeal rights are waived and that joint offers are terminated.
Signatures	Execution Block	Original ink signatures, printed legal names, and execution dates for all applicants.

Header: Offer Tracking and Taxpayer Information

Enter your official IRS Offer Number at the top of the page. This number can be found on your initial IRS receipt letter or any correspondence from your offer specialist. Enter your full legal name, Social Security Number (SSN), or Employer Identification Number (EIN). If the offer was submitted jointly by a married couple, include both spouses’ names and tax identification numbers.

The Withdrawal Statement

The core statement reads: “I hereby withdraw my Offer in Compromise (OIC) dated [Date].” Enter the exact date when your original Form 656 was signed. This connects your cancellation request to the specific compromise package in the IRS computer system.

Reviewing Mandatory Acknowledgments

Before signing, you must read and acknowledge four binding administrative terms:

• Waiver of Appeal Rights: By voluntarily withdrawing your offer, you permanently forfeit your right to appeal to the IRS Independent Office of Appeals.
• Joint Offer Rule: If an offer was filed jointly by married taxpayers, either spouse has the legal power to withdraw it. If one spouse signs Form 14773, the entire joint offer is cancelled for both taxpayers.
• Effective Date Differences: You acknowledge that certified mail or hand delivery makes the withdrawal effective upon IRS receipt, whereas regular mail or fax requires an IRS acknowledgment letter to become legally effective.

Signatures and Execution

Sign and print your legal name and enter the date. If a joint offer was submitted, the spouse should also sign and print their name. If an authorized legal representative (such as an attorney or CPA) executes the withdrawal on your behalf, a valid Form 2848 (Power of Attorney) must already be on file with the IRS.

8. Required Documents and Information Needed Before Filling

To ensure your withdrawal is processed without confusion, compile the following records before drafting Form 14773:

• A copy of your original signed Form 656 or Form 656-L.
• The initial IRS acknowledgment letter (such as Letter 1022) showing your assigned Offer Number.
• Contact information for your assigned IRS offer specialist, revenue officer, or appeals officer.
• A fully executed Form 2848 (Power of Attorney) if legal counsel is representing you.

9. Common Mistakes to Avoid

Withdrawing an Offer in Compromise has permanent consequences. Avoid these frequent and costly mistakes:

• Expecting Application Fees or Deposits Back: Under federal law, the $205 OIC application fee and any initial 20% down payments or monthly periodic payments submitted with Form 656 are non-refundable. The IRS keeps these funds and applies them toward your total unpaid tax balance.
• Withdrawing Right Before an Anticipated Rejection: If your examiner informs you that your offer will likely be rejected, withdrawing it voluntarily waives your right to appeal. If you let the IRS issue a formal rejection letter, you gain a statutory 30-day window to appeal the decision using Form 13711.
• Having No Backup Collection Plan: While an offer is pending, the IRS is barred by law from issuing bank levies or wage garnishments. The moment your withdrawal is finalized, the collection freeze dissolves, leaving your assets vulnerable unless an installment agreement or hardship status is established immediately.
• Sending via Standard Unregistered Mail: If you use regular first-class mail, your 10-year collection statute remains frozen until an IRS clerk opens the envelope and mails an acknowledgment letter. Always use certified mail to stop the statutory freeze on the date of delivery.
• Forgetting the Joint Impact: In divorce or separation cases, one spouse often withdraws the offer without informing the other, inadvertently terminating tax relief for both individuals.

10. Penalties for Non-Filing or Errors

Because Form 14773 is a voluntary cancellation request, there are no late-filing fines or statutory civil penalties for failing to submit it. However, the procedural consequences of withdrawing an offer are substantial:

• Immediate Resumption of IRS Enforced Collection: The statutory protection against levies, seizures, and wage garnishments under Internal Revenue Code Section 6331(k) terminates upon withdrawal. The IRS can resume aggressive collection actions immediately.
• Permanent Loss of Tolled Time: The months or years during which your offer was under review are permanently added onto your 10-year collection statute of limitations (CSED), giving the IRS extra time to collect the full debt.
• Loss of Settlement Terms: All negotiated compromise figures are erased. You remain legally liable for the entire original tax liability, including accrued interest and failure-to-pay penalties.

11. Related Forms or Schedules

Form 14773 operates within an interconnected network of IRS tax debt resolution documents:

• Form 656: Offer in Compromise (the primary compromise agreement form).
• Form 656-L: Offer in Compromise – Doubt as to Liability (used when disputing the validity of the tax debt itself).
• Form 433-A (OIC): Collection Information Statement for Wage Earners and Self-Employed Individuals.
• Form 433-B (OIC): Collection Information Statement for Businesses.
• Form 13711: Request for Appeal of Offer in Compromise (used to dispute formal rejections).
• Form 9465: Installment Agreement Request (used to set up monthly payment plans after withdrawing an offer).
• Form 2848: Power of Attorney and Declaration of Representative.

12. Frequently Asked Questions (FAQs)

1. Will the IRS refund my money if I withdraw my Offer in Compromise?

No. Under federal statute, the $205 application fee and any initial or periodic payments sent with your offer are completely non-refundable. The IRS applies every dollar submitted directly to your outstanding tax balance.

2. Can I submit a new Offer in Compromise after withdrawing with Form 14773?

Yes. Withdrawing an offer does not bar you from submitting a new offer in the future. However, you will be required to pay a new $205 application fee, submit new initial payments, and provide updated financial disclosures.

3. Why would a taxpayer voluntarily withdraw an offer?

Common reasons include an unexpected increase in income or assets that makes acceptance unlikely, discovering that the 10-year collection statute is close to expiring, or an inability to gather the detailed financial documentation demanded by the IRS examiner within tight deadlines.

4. Does withdrawing an offer cancel an active federal tax lien?

No. Submitting or withdrawing an Offer in Compromise does not remove a Notice of Federal Tax Lien. A filed tax lien remains attached to your property until the tax debt is paid in full, expires by statute, or is discharged through other relief programs.

5. Can my attorney sign Form 14773 on my behalf?

Yes, provided you have an active IRS Form 2848 (Power of Attorney) on file authorizing your representative to handle Offer in Compromise matters for the specific tax years involved.

6. What happens if only one spouse signs Form 14773 on a joint offer?

Under IRS administrative rules, if an offer was submitted jointly by a married couple, either spouse has the legal authority to withdraw it. A withdrawal signed by only one spouse terminates the offer for both individuals.

13. Conclusion: Key Takeaways

IRS Form 14773 provides taxpayers with a clear, definitive exit ramp from the Offer in Compromise program. Whether your financial situation has improved, you wish to restart your 10-year collection clock, or you want to pivot to an installment agreement, Form 14773 officially cancels your pending compromise.

Because withdrawing an offer waives your administrative appeal rights, forfeits non-refundable deposits, and immediately lifts the freeze on IRS levies, you should never withdraw an offer lightly. Consult with an experienced tax attorney, CPA, or enrolled agent to ensure you have a replacement collection defense ready before submitting Form 14773.