Offer in Compromise Review I can never write enough about Offer in Compromise. Every day people e-mail me, telling me that they can't decipher the convoluted Offer forms. Hopefully this brief F.A.Q will help you with your various OIC questions.
What IRS Form(s) do I use to submit an Offer in Compromise?
In order to submit an Offer in Compromise you need the following IRS Forms:
• IRS Form 656-B booklet for “Offer in Compromise”
• Form 656-PPV, “Offer in Compromise Payment Voucher”
Is the initial payment with the offer refundable if not accepted?
No, both the initial 20% payment and $150 application fee are nonrefundable...even if your offer is not accepted. For this reason, it’s imperative to ensure everything on Form 656-B is filled out accurately and completely, and you know for certain that your offer will be accepted.
Is it possible to settle IRS Tax Debt for Pennies on the Dollar?
In exceptionally rare cases (less than 1%), the IRS has settled IRS Tax Debt for very low sums or “pennies on the dollar”. Only a 2% of people qualify for their IRS Tax Debt to be settled at all.
What extra documents are needed for Submitting an Offer in Compromise?
You need documents to prove why you cannot pay your IRS Tax Debt in full. You can include past-due bills, receipts, hospital bills, etc.
What factors determine if my Offer will be approved?
The IRS looks at three main factors.
• Doubt as to Collectibility: You can’t pay your bill now or in the next ten years.
• Doubt as to Liability: You are not at fault for the IRS Tax Debt.
• Effective Tax Administration: Collecting on the debt in full would cause an economic hardship.
My Offer was not approved. Now what do I do?
The first thing you need to do is double check your application for mistakes. Most forms are returned due to small errors, like forgetting to sign the paperwork. If you know you didn't make a mistake, you should try hiring a professional to resubmit your offer for you.
What are the benefits of hiring a professional to prepare my Offer?
An experienced Tax Professional knows their way around the IRS better than the average Taxpayer. They have a higher chance of getting your Offer approved. Hiring a Remember, the $150 application fee and 20% initial payment you submit with your offer is nonrefundable.