If my client’s Offer was accepted but now they can no longer afford to pay the Offered amount, can they renegotiate or do they have to start over again?

No they do not necessarily have to start again. When a taxpayer is unable to pay the balance of an accepted offer, the Service has the option to modify the accepted OIC. The taxpayer must be current with their filing and payment compliance requirements or the modifying of the accepted OIC will not be considered. In this situation, the IRS has the option to:
– Adjust the payment terms of the offer.
– Formally compromise the existing offer.
– Obtain managerial approval to settle the offer for the amount already paid and not default the offer.
The taxpayer must submit a signed letter to request a modification of an accepted offer. Advise the taxpayer that:
– OIC is referring the request to the originating office.
– A current financial statement will be required.
– They must remain current with their filing and payment compliance requirements subsequent to the acceptance date of the original offer.