Offer in Compromise Form 656 OIC Booklet

The instructions in this video are up-to-date, however your form may look different from the images shown. Please visit irs.gov forward slash oic for the current form and more information. Do you owe money to the IRS and are unable to pay the full amount? If so, you may be eligible to settle your tax debt for less than you owe. It's called an Offer in Compromise, or OIC, or Offer. You can submit an offer by yourself, or you can hire someone to help you. So what is an Offer in Compromise? Here's a brief explanation. An Offer in Compromise, or Offer, is an agreement between you, the taxpayer, and the IRS that settles a tax debt for less than the full amount owed. To be considered, generally you must make an appropriate offer based on what the IRS considers to be your true ability to pay. This video playlist will lead you through a series of steps and forms to help you calculate an appropriate offer based on your assets, income, expenses, and future earning potential. We'll then walk you through the actual Form 656, Offer in Compromise, itself. Finally, we'll go through a checklist to ensure you're including everything you need to get your process to go smoothly. Follow these steps to make an offer. Before you start investing time to do the paperwork necessary to submit an offer, you can use your IRS's individual online account to make sure you're eligible to file one. You can check eligibility, calculate a potential offer amount, make payments, and submit your offer online using this tool. If you don't have an individual online account, you can check eligibility and calculate a potential offer amount using the Offer in Compromise pre-qualifier tool. Find the link to these tools at www.irs.gov. Note, even though individuals and businesses can submit an offer, the tools are currently only available to individuals. Now is also a good time to suggest you review the information on irs.gov. Simply use the search term OIC. You'll want to review the frequently asked questions most people have about offers. If you meet the eligibility requirements to submit an offer, the next step is to visit irs.gov forward slash OIC to link to the individual online account if you're an individual or download the most current Form 656B Offer in Compromise booklet. It's important to make sure you're using the most current year version of the booklet to avoid unnecessary issues with processing. There's an application fee to submit an Offer in Compromise, and you must submit a down payment unless you qualify for the low-income certification or submit a doubt-as-to-liability offer. Check the most current OIC Form 656B to get the current fee. The booklet contains the OIC application form and other forms you'll need to submit your offer, whether you're an individual or a business. The forms include Form 433A, OIC, Collection Information Statement for Wage Earners and Self-Employed Individuals, Form 433B, OIC, Collection Information Statement for Businesses, and Form 656, Offer in Compromise. Note, this form is located at the end of the booklet after Forms 433A and B OIC. It's helpful to complete the Information Statement forms first before you complete Form 656. Each of these forms also helps you determine a potential offer amount based on your assets, income, expenses, and future earning potential. Be sure to read the instructions in the booklet, especially the seven steps it lists as the application process. Now, before you watch the next video, be aware that if you or your business is currently in a bankruptcy proceeding, you are not eligible to apply for an offer. Also be aware that a separate application is necessary for each tax entity. For example, each individual taxpayer or non-sole proprietor of business, such as a corporation or partnership wanting to submit an offer for consideration, needs its own application. If you're an individual taxpayer, including one who is self-employed or is a sole proprietor, please watch the next video on completing Form 433A. If you're submitting an offer for a business only, please skip the next video and watch the third video in the playlist on completing Form 433B. There's also a final OIC Package Checklist video in this playlist for you to view. Note, if you're working with an IRS employee, let them know that you're sending or have sent an offer in compromise to settle your tax debts.