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How do I complete an OIC?

First obtain a Form 656, Offer in
Compromise package (Version 7/2004). The package includes information and
instructions for completing the form, as well as a worksheet that can be used to
calculate an amount to offer. Form 433-A, Collection Information Statement for
Wage Earners and Self-Employed Individuals, and Form 433-B, Collection
Information Statement for Businesses (Version 5/2001), are included in the Form
656 package and may need to be completed as well depending upon each individual
situation. Taxpayers will need to review and include amounts for items such as
housing and utilities from the Collection Financial Standards, and Necessary Expenses, to complete their collection information statement(s).

NOTE: For corporations and partnerships, Form 433-A may be requested from corporate officers and individual partners.

Source: www.irs.gov - revised 8/2004

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Irs Offer In Compromise Related Articles

Can taxes be settled by offering pennies on the dollar?

OICs must include an amount equal to or greater than the total value of all assets, plus future income. That total is generally the reasonable collection potential amount, and not simply an offer of...

Are there any instances when the application fee will be applied against the amount of the offer or refunded to me after the OIC has been accepted for processing?

Yes. The fee will be applied against the amount of the offer or, if the taxpayer requests, returned to the taxpayer if: If the IRS accepts an OIC based on effective tax administration (ETA). If the...

How many Forms 656 must I complete if my spouse and I are submitting one offer to compromise the same joint liability? How many application fees must be attached?

A married couple owing the same joint income tax liability may file only one Form 656 listing the joint liability. One fee of $150 should be attached to Form 656. A married couple opting to file separate...

What happens if I default my OIC?

The IRS may take the following actions: Immediately file suit to collect the entire unpaid balance of the offer Immediately file suit to collect an amount equal to the original amount of the tax...

What happens if the IRS does not accept an OIC?

Once the IRS determines it cannot accept an offer, the taxpayer will be advised of the reasons behind the decision. The taxpayer will be afforded another opportunity to submit any other information...