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Tag Archive for Form 656

IRS Needs To Improve Its Offer In Compromise Process

Ron Marini

Internal Revenue Service has taken steps to improve the offer in compromise process for both taxpayers and the IRS, but it can still do more, according to a new report.

An offer in compromise is an agreement between a taxpayer and the IRS that settles a tax liability for a payment of less than the full amount owed.

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Alphabet Soup For Offers In Compromise (“OIC”)

I. Concept and Goals

a. Taxpayers who have few assets and little prospect of generating sufficient income to pay a tax liability in full may be allowed to strike a settlement for less than the full amount due to settle their case.

b. The IRS’s acceptance of an offer in compromise conclusively settles the liability, absent fraud or mistake.

c. What is the policy goal? To achieve collection of what is potentially collectible at the earliest possible time and at the least cost to the government while providing taxpayers with a fresh start toward future voluntary compliance. Read more

Do You Have the Most Recent Offer-In-Compromise Form?

When submitting your client’s Offer in Compromise, use the January 2014 versions of Form 656-B, Offer in Compromise Booklet, and Form 656, Offer in Compromise.

The OIC user fee has increased from $150 to $186 in January. IRS will return applications submitted on older versions of the form with the old user fee.

On Monday, August 5, 2013, we posted Eight Tips for Taxpayers Who Owe Taxes, which discussed that while most taxpayers get a refund from the IRS when they file their taxes, some do not. The IRS offers several Payment Options for those who owe taxes and we provided eight tips for those who owe federal taxes.

Tip #6 discussed an Offer in Compromise. The IRS Offer-in-Compromise program allows Read more