Offer in Compromise: The Facts
An OIC (Offer in Compromise) is a possible solution to resolving your tax debt through an agreement with the IRS. Our company can help you submit an OIC to reduce your taxes and IRS problems. You have to meet any of the following criteria and accomplish an Offer in Compromise (Form 656) to be eligible for an OIC: It's decided that the IRS may not be able to collect from you now or later (Doubts as to Collectability).
The IRS doubts if you owe the tax (Doubts as to Liability).
Settling the tax would put you and your family in a hardship (Effective Tax Administration). Your full name, social security number, address, and employer identification number are needed on the Form 656. If you're filing the OIC jointly, submit both names. Other specific criteria is also included in this form. Let our firm advise you on the proper way to fill out the form. In order for the OIC to be accepted, you must list all your unpaid liabilities on the Form 656. This includes most federal taxes, such as Employer's Quarterly Federal Tax Return (941), Employer's Annual Federal Unemployment Tax Return (940), income tax (1040/1120), and Trust Fund Recovery Penalty assessment. Our firm will help you figure out if you're offering Doubt as to Collectability or Doubt as to Liability. Also, the amount you're offering the IRS should also be included, basing on: The equity in your assets
Your average monthly income minus your necessary expenses and then multiply by 48 or 60 months or by the life of the collection statute You must state whether you are paying a deposit at the time of filing or paying in full, as well as set a deadline when you can pay in full. Your signature is needed on the offer and the date you signed. Another piece is Form 433-A (Collection Information Statement). This is for individuals. There is a separate form for businesses (433-B). This form must be attached to Form 656 if you're filing an OIC on the basis of Doubt as to Collectability. All blocks on the form must be filled out. If a block does not concern you, simply put N/A. You'll also have to submit documents showing values of assets, encumbrances, and information on 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. In lieu of this form, you must submit a detailed explanation why you feel you do not owe the tax.
