The IRS recently updated their OFFER IN COMPROMISE BOOKLET. This is called Form 656 Booklet, Offer In Compromise.
This is actually a very good publication from the IRS. It gets to the point in only 6 pages. Then the booklet goes on to provide the 22 pages of forms required to submit the application for an Offer In Compromise.
Here is the IRS’ description of an Offer in Compromise from a recently posted tax tip.
An offer in compromise is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed. An offer in compromise is an option when a taxpayer can’t pay their full tax liability. It is also an option when paying the entire tax bill would cause the taxpayer a financial hardship. The goal is a compromise that suits the best interest of both the taxpayer and the agency.
When reviewing applications, the IRS considers the taxpayer’s unique set of facts and any special circumstances affecting the taxpayer’s ability to pay as well as the taxpayer’s:
- Asset equity
The booklet covers everything a taxpayer needs to know about submitting an offer in compromise, including:
- Who is eligible to submit an offer
- How much it costs to apply
- How the application process works
The booklet also includes the forms that taxpayers must complete as part of the offer in compromise process. The current application fee is $205. However, taxpayers who meet the definition of a low-income taxpayer don’t have to pay this fee.
The IRS also offers an online tool to see if you qualify. I’m going to give you the link, but with a warning…I don’t like it works very well. Here it is if you want to check it out: Offer In Compromise Pre-Qualifier tool.
If you think you may qualify for an Offer In Compromise and don’t want to go it alone, contact me and we will figure it out together.