Offer in Compromise
An OIC (Offer in Compromise) is the possible answer to settling your debt by a contract with the IRS.
You can submit an OIC and lessen your IRS issues and taxes with the help of our firm.
Form 656 (Offer in Compromise) would need to be accomplished to be eligible for an OIC, and you must be under the criteria:
- It is decided that the IRS may not be able to collect from you now or later (Doubts as to Collectability).
- Doubts as to Liability: There’s doubt that you even owe the tax.
- Settling the tax would put you and your family at a hardship (Effective Tax Administration).
Our office will help you accomplish the Form 656 appropriately, because there are specific criteria included. The form will need your name, address, employer identification number, and social security number, and for joint filing, both your information will be needed.
Form 656 also needs 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 included. You have to list all taxes you might owe the IRS or your OIC will not be accepted.
Our firm can help you figure out what to offer, either it’s Doubt as to Liability or Doubt as to Collectability.
The amount you’re offering the IRS must also be entered. 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
- Your assets’ equity
You’ll have to inform the IRS of whether you’re going to pay in full or if you are simply paying a deposit at the time you submit. You’ll also need to set a due date for when the balance will be paid in full.
Do not fail to sign and date the offer.
Also needed is the Collection Information Statement (Form 433-A). Individuals should fill out this form. Form 433-B is a separate form for businesses. This form must be included with Form 656 only if you’re filing an OIC on the basis of Doubt as to Collectability. Make sure you accomplish all blocks on the form. If a block does not concern you, put N/A. You’ll also have to submit documentation regarding values of assets, encumbrances, and income and expense.
If you are submitting an OIC based on Doubt as to Liability, there’s no need for Forms 433-A or 433-B. However, a detailed explanation why you believe you don’t owe the tax must be filed.
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