Offer in Compromise: The Facts

A likely resolution to settling debt is an agreement with the IRS known as Offer in Compromise (OIC).

You can submit an OIC and reduce your IRS issues and taxes with the assistance of our firm.

To be considered for an OIC, you have to accomplish Form 656 (Offer in Compromise) and be under one of these criteria:

• Doubts as to Liability – There is doubt that you owe the tax.
• Doubts as to Collectability – doubts that you will pay now or in the future
• Effective Tax Administration – settling the tax debt would place you and your family at hardship

Form 656 needs your full name, address, social security number, and employer identification number. For joint submissions, i.e., husband and wife, both names should be submitted. Other specific criteria is also involved in this form. Let our office assist you on the appropriate way to fill out the form.

Form 656 also requires you to identify your unpaid liabilities to be compromised. Other federal taxes, such as 1040/1120 (income tax), 941 (Employer's Quarterly Federal Tax Return), 940 Employer's Annual Federal Unemployment Tax Return, and Trust Fund Recovery Penalty assessment are involved. The OIC will not be accepted if you do not identify all the taxes you might owe.

Our firm can give IRS Help to help you determine what to offer, whether it is Doubt as to Liability or Doubt as to Collectability.

The amount you are offering the IRS should also be specified. The amount must be based on:

• Your average monthly income minus your necessary expenses and then multiply by 48 or 60 months or by the life of the collection statute
• The equity of your assets

Whether paying in full or a deposit, you should specifically inform the IRS, as well as determine a due date when you can pay in full.

Your signature is required on the offer, as well as the date you signed.

If you are filing an OIC based on Doubt as to Collectability, you have to attach a Collection Information Statement (Form 433-A for individuals or Form 433-B for businesses) with the Form 656. All the blocks on the form must be accomplished, and if a block is unapplicable, simply lable it N/A. Documentation showing information on expenses and income, asset values, and encumbrances also should be included.

If submitting based on Doubt as to Liability, you don't need the Form 433-A or Form 433-B. In lieu of this form, you simply have to file a detailed explanation of why you believe you do not owe the tax.

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Originally posted 2007-11-06 00:02:33. Republished by Blog Post Promoter

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