FILING FOR IRS OFFER IN COMPROMISE
tuition fees , charitable payments , and unsecured debt payments are not factored in calculating expenses .
2 . Fill Out the Required Forms
Submitting an OIC application requires taxpayers to furnish the essential personal and financial details in the prescribed forms . Taxpayers falling under different categories need to fillin separate forms to apply for the IRS Offer in Compromise . All in all , there are three forms that must be duly filled-in and submitted to the IRS for evaluation :
Form 656
Form 656 is the main Offer in Compromise form that is supposed to be completed by any person or corporation filing for an OIC . The form asks for basic information about the taxpayer , the type of debt , and identifies the payment terms , should the IRS find your application reasonable .
Form 433 A
Individual wage earners , sole proprietors , or people submitting applications on the behalf of deceased individual taxpayers need to complete Form 433A . Once you submit the form , the IRS will come up with an offer amount after factoring your assets , income , expenses , and earning potential based on educational qualifications and experience .
Form 433 B
Form 433 B is exclusively meant for businesses filing for an OIC that , including Corporations , Partnerships ,
LLC classified corporations , and single or multi-member LLCs . In such instances , the IRS officials will evaluate the OIC claim to decide on an appropriate offer amount , depending on the assets , income , expenses and future earning potential of the business .
3 . Attach the Required Documents
After completing the forms in your respective category , the job is only half done . The next step is to supply the necessary documents for the IRS to check the legitimacy of the information contained in each of the forms . Though
Form 656 is common for all IRS Offer in Compromise applicants , suitable documentation needs to be attached with Form 433-A and Form 433-B . You can find the list of documents to be attached at the bottom of each form . When attaching documents , make sure that you attach scanned copies and not the originals .
4 . Include a Check Covering the Application Fees
The IRS requires you to pay a nonrefundable $ 186 application fee when filing an Offer in Compromise . On top of that , you are also expected to make an initial payment based on the payment option selected while filling out Form 656 . The amount of the initial payment and whether it is going to be a one-time or recurring payment depends on the payment method selected by the OIC applicant . Include separate personal checks , cashier ’ s checks or money orders for making both payments . The application fee and initial payment are , however , exempted for people meeting the low income certification guidelines .
Things to Remember
Apart from using tax enforcement efforts such as audits to recover the money , the IRS also helps delinquent taxpayers mitigate financial hardships through programs such as the Offer in Compromise .
Even after submitting an Offer in Compromise , the IRS may ask for additional information to evaluate the suitability of your application . Therefore , it is advisable to promptly reply to any such requests from the IRS within the stipulated timeline to keep your application on track . The IRS takes about 6 to 12 months to evaluate your Offer in Compromise application , after which they sending an Offer of Acceptance or Rejection , whichever is applicable . The IRS laws are quite complex and therefore , you should seek professional assistance when applying for an OIC to increase chances of acceptance . If you want to learn about IRS Debt Relief or the OIC Program , look no further than the Law Offices of Nick Nemeth . To get a noobligation free consultation with Nick , fill out our contact form . You can also call us at 972-627-4705 .
For CPA ’ s and Attorneys : If you are in the Dallas , Ft . Worth and surrounding areas and need help with any of your clients , please do not hesitate to ask us for help .
National Association of Consumer Bankruptcy Attorneys Summer 2017 CONSUMER BANKRUPTCY JOURNAL 23