Jim, remember, centralized Offer in compromise is worthless – appeal. You always appeal. The Offer specialists once told me a defunct LLC was worth 700,000 of future income. They are, to out it mildly, dip-shits.
I would advise them not to give up hope and continue soldiering on and appeal. If ultimately the Offer fails you can make him uncollectible or set up a small IA and try and run out the 10 year statute. At the end of the day it is not her issue, though I am sure they would like it done now. I do not see the IRS pursuing her as a successor when its a different form, the assets were all purchased through the RO.