Get the free Offer in Compromise - Louisiana Department of Revenue - ldr la

R-20211 (11/98) Basic Information Concerning Offer in Compromise A publication of the Louisiana Department of Revenue P.O. Box 201, Baton Rouge, LA 70821-0201 November 1999 R-20211 (11/98) State of

How to fill out offer in compromise

How to fill out an offer in compromise:

1. Gather all necessary documentation: To start the process of filling out an offer in compromise, you will need to collect all relevant financial documents, including tax returns, bank statements, and income records. These documents will help determine your eligibility and assist in evaluating your financial situation.
2. Complete Form 656: The next step is to complete Form 656, which is the official application for an offer in compromise. This form requires detailed information about your financial status, including your income, expenses, assets, and liabilities. Ensure that you accurately and honestly disclose all the necessary information to avoid any potential penalties.
3. Submit the required financial statements: Along with Form 656, you need to include your financial statements to support your offer in compromise. Provide comprehensive documentation of your income, such as pay stubs or profit and loss statements if you are self-employed. Additionally, you will need to disclose your expenses, assets, and liabilities in detail.
4. Pay the application fee: There is a non-refundable application fee associated with filing an offer in compromise. As of [current year], the fee is $205, but it may vary, so check the latest instructions or consult with a tax professional. You can pay the fee via check or money order, and it should be made payable to the U.S. Treasury.
5. Submit the application package: Once you have completed Form 656, attached the required financial statements, and paid the application fee, you are ready to submit your offer in compromise package. Make sure to review everything one last time to ensure accuracy and include any supporting documentation necessary to strengthen your case.

Who needs an offer in compromise?

1. Individuals facing financial hardship: An offer in compromise is typically suitable for individuals who are experiencing significant financial hardship and are unable to pay their tax debt in full. It provides an opportunity to settle the debt for less than the total amount owed, making it a valuable option for those struggling to meet their tax obligations.
2. Taxpayers with large tax debts: If you owe a substantial amount of tax debt that you genuinely cannot pay, an offer in compromise may be a viable solution. It allows you to negotiate with the IRS to reduce the debt to an amount that is more manageable for your financial situation.
3. Taxpayers with limited income and assets: The IRS considers several factors when evaluating eligibility for an offer in compromise, including your income, expenses, and assets. If you have limited income and few valuable assets, you may qualify for this program. However, it is essential to consult with a tax professional to determine your eligibility and properly navigate the application process.

In conclusion, individuals facing financial hardship, taxpayers with large tax debts, and those with limited income and assets may need to consider an offer in compromise as a potential solution for resolving their tax debt.

For pdfFiller’s FAQs

What is offer in compromise?

An 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 debt or for whom paying the full amount would create financial hardship may be eligible to file an offer in compromise.

How to fill out offer in compromise?

Taxpayers must complete and submit Form 656, along with the required financial information and supporting documentation, to the IRS in order to fill out an offer in compromise.

What is the purpose of offer in compromise?

The purpose of an offer in compromise is to provide taxpayers with a way to settle their tax debts and get a fresh start financially.

What information must be reported on offer in compromise?

Taxpayers must report detailed financial information, including income, expenses, assets, and liabilities, on their offer in compromise.

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