Get the free Offer and Compromise Application Individuals and Self Employed

Offer in Compromise Agreements form is for use by individuals who are self-employed. Incomplete applications will not be accepted. If the form is not complete, the Commissioner may disregard your application.

How to fill out offer and compromise application

How to fill out offer and compromise application

1. Step 1: Gather all necessary financial information, such as income, expenses, assets, and debts.
2. Step 2: Determine your eligibility for an offer in compromise by using the IRS pre-qualification tool or consulting a tax professional.
3. Step 3: Fill out Form 656, Offer in Compromise, including all required attachments and supporting documentation.
4. Step 4: Calculate your offer amount by using the IRS Offer in Compromise formula or seeking help from a tax professional.
5. Step 5: Submit your completed application, along with the required initial payment and application fee, to the IRS.
6. Step 6: Wait for the IRS to review your application. This process may take several months.
7. Step 7: Respond promptly to any requests for additional information or clarification from the IRS.
8. Step 8: If your offer is accepted, fulfill all the terms and conditions outlined in the acceptance letter. If it is rejected, consider appealing the decision or exploring other options.

Who needs offer and compromise application?

1. Individuals and businesses with outstanding tax debt who are unable to pay the full amount owed, but can afford to pay a reduced amount.
2. Taxpayers who have explored other payment options, such as installment agreements, and found them unfeasible or unreasonable.
3. Taxpayers facing financial hardship or experiencing exceptional circumstances that make it difficult to meet their tax obligations.
4. Those who can demonstrate that the full amount of tax debt would cause significant economic hardship or be unfair or inequitable to require payment in full.

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What is offer and compromise application?

An Offer in Compromise allows taxpayers to settle their tax debt for less than the full amount owed.

Who is required to file offer and compromise application?

Taxpayers who are unable to pay their full tax liability or if doing so would create financial hardship.

How to fill out offer and compromise application?

Taxpayers can fill out the application form provided by the IRS and provide all required financial information.

What is the purpose of offer and compromise application?

The purpose is to provide taxpayers with a way to settle their tax debt for less than the full amount owed.

What information must be reported on offer and compromise application?

Taxpayers must report their income, expenses, assets, and liabilities.