IRS can reject Offer In Compromise if taxpayer can afford to pay the full amount
Crawford Pile Driving, LLC v. Commissioner (U.S. Tax Court 2025) Offer-in-Compromise Rejection in CDP Review Summary
The Tax Court upheld the IRS’s levy and lien against Crawford Pile Driving, LLC after finding that the company could afford to pay its full tax debt. Appeals had rejected the company’s $111,077 settlement offer because updated financial records showed it could pay about $2.3 million, and the court agreed that was reasonable.
Holding
The Tax Court granted summary judgment for the IRS and upheld the levy and lien. Because the taxpayer did not challenge the underlying tax amounts at its first hearing, the court reviewed only whether Appeals followed the rules and acted reasonably. It found no abuse of discretion.
Appeals verified that all legal and procedural steps were met, considered the settlement offer, and reasonably rejected it after recalculating a much higher ability to pay based on 2023–2024 financial data.
The court agreed that the Appeals applied the correct standards and acted within its authority.
Why It Matters
Confirms that Appeals may reject a doubt-as-to-collectibility offer…
