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2a. Is the sum offered in compromise borrowed money? No Yes (If Yes, give name and address of lender and list of collateral, if any, pledged to secure the loan.)

How to fill out offer in compromise

1. The first step in filling out an offer in compromise is to gather all the necessary financial information. This includes gathering documents such as tax returns, bank statements, pay stubs, and any other relevant financial records.
2. Once you have gathered all the necessary documents, you will need to complete Form 656, also known as the Offer in Compromise form. This form is provided by the Internal Revenue Service (IRS) and requires detailed information about your financial situation.
3. In addition to Form 656, you will also need to complete Form 433-A (OIC) or Form 433-B (OIC), depending on whether you are an individual or a business. These forms provide a snapshot of your assets, income, and expenses and help the IRS determine your ability to pay your tax debt.
4. It is important to provide accurate and complete information on these forms to avoid any delays or rejections of your offer in compromise. Make sure to double-check all the information before submitting the forms.
5. Along with the forms, you will also need to include a non-refundable application fee and an initial payment towards your tax debt. The amount of the payment will vary depending on your financial situation and the specific terms of your offer in compromise.
6. Once you have completed all the necessary forms and made the required payment, you can submit your offer in compromise to the IRS. It is important to keep copies of all the documents for your records.
7. After submitting your offer in compromise, you will need to wait for the IRS to review your application. This process can take several months, so it is important to be patient.
8. If the IRS accepts your offer in compromise, you will be required to abide by the terms of the agreement. This usually includes making timely payments towards your tax debt and staying in compliance with all tax laws.

Who needs an offer in compromise?

1. Individuals or businesses who are unable to pay their tax debt in full and can demonstrate financial hardship may be eligible for an offer in compromise. This can include individuals facing significant financial difficulties, such as job loss or medical expenses, or businesses experiencing financial hardship.
2. It is important to note that the IRS has specific criteria for determining eligibility for an offer in compromise. This includes considering factors such as income, expenses, asset equity, and future earning potential. Individuals or businesses who do not meet these criteria may not qualify for an offer in compromise.
3. It is recommended to consult with a tax professional or seek assistance from a tax attorney when considering an offer in compromise. They can provide guidance on the process and help determine if it is the best option for your specific financial situation.

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What is offer in compromise?

Offer in Compromise is an agreement between a taxpayer and the IRS that settles the taxpayer's tax liabilities for less than the full amount owed.

Who is required to file offer in compromise?

Taxpayers who are unable to pay their full tax liability or for whom paying their full tax liability would create a financial hardship may be required to file an offer in compromise.

How to fill out offer in compromise?

Taxpayers can fill out offer in compromise by completing Form 656 and submitting it along with supporting documentation to the IRS.

What is the purpose of offer in compromise?

The purpose of offer in compromise is to provide taxpayers with a way to settle their tax debts for less than the full amount owed, based on their ability to pay.

What information must be reported on offer in compromise?

Taxpayers must report their income, expenses, assets, and liabilities on offer in compromise, along with supporting documentation.