The Facts on Offer in Compromise

An OIC (Offer in Compromise) is the likely resolution to solving debt through a contract with the IRS.

Everyone wishes to lessen taxes, especially those of you who have IRS problems. Our company assist you with the requirements needed to submit an OIC.

Form 656 (Offer in Compromise) would should be accomplished to be eligible for an OIC, and you should meet the criteria:

• It's determined that the IRS may not be able to collect from you now or later (Doubts as to Collectability).
• Doubts as to Liability: There is doubt if you even owe the tax.
• Settling the tax would put you and your family at a hardship (Effective Tax Administration).

Our office can help you fill out Form 656 properly, since there are specific criteria involved. The form will need your name, address, employer identification number, and social security number, and for joint filing, both your information will be asked for.

Form 656 also needs you to identify your unpaid liabilities to be compromised. Any 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. You need to identify all taxes you might possibly owe the IRS or your OIC won't be honored.

You must state whether you are offering "Doubt as to Liability" or "Doubt as to Collectability" on Form 656. This part of the form is complicated and our office can help you determine which is the best choice for you.

Also, the amount you're offering the IRS must also be included, based on:

• The equity of your assets
• Your monthly income, exluding expenses, multiplied by the life of the collection statute (48 or 60 months)

You must specify if you're paying a deposit at the time of filing or paying in full, as well as determine a due date when you can settle the balance in full.

Also sign and date the offer.

Also necessary is the Collection Information Statement (Form 433-A). This form is for individuals. There is a separate form for businesses (433-B). This form must be attached to Form 656 only if you are submitting an OIC on the basis of Doubt as to Collectability. Make sure you accomplish all blocks on the form. If a block doesn't pertain to you, simply put N/A. You will also need to submit documents showing values of assets, encumbrances, and income and expense.

Form 433-A or B is not required if you're submitting an OIC on the basis of Doubt as to Liability. You just should explain why you feel you don't owe the tax on a detailed explanation.

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