Understanding Form 656 and Mastering its Completion for an OIC Submission
When dealing with tax debts, individuals or businesses struggling with financial obligations may find relief through the Offer in Compromise (OIC) program offered by the Internal Revenue Service (IRS). The OIC program allows taxpayers to settle their tax liabilities for less than the total amount owed. To initiate this process, one must submit a comprehensive and accurate Form 656, also known as the Offer in Compromise application. In this article, we will delve into the details of Form 656, exploring its purpose, requirements, and the essential steps to complete it effectively for a successful OIC submission.
Understanding the Purpose of Form 656
Form 656 serves as the official application for individuals or businesses seeking an OIC from the IRS. It provides detailed information about the taxpayer's financial situation, supporting their request for a reduced settlement amount. The purpose of Form 656 is to...
Dealing with tax debt can be overwhelming and stressful, especially when you're struggling to meet your financial obligations. Fortunately, the Internal Revenue Service (IRS) offers taxpayers a potential solution through the Offer in Compromise (OIC) program. An OIC allows eligible individuals to settle their tax debt for less than the total amount owed. However, not all OIC applications are accepted. The IRS carefully evaluates several factors before approving an OIC. In this article, we will explore the key considerations the IRS takes into account when accepting OICs, helping you understand what it takes to increase your chances of a successful OIC application.
The IRS will assess your ability to pay based on your current financial situation. This includes factors such as your income, expenses, assets, and liabilities. The IRS will review your income sources, employment status, and monthly earnings. They will also examine your essential living...
Coping with tax debt can be an overwhelming and stressful experience. Fortunately, the Internal Revenue Service (IRS) offers a range of programs to assist taxpayers in resolving their tax obligations, among which is the Offer in Compromise (OIC) program.
The OIC program provides taxpayers with the opportunity to settle their tax debt for an amount less than the total owed. This program specifically caters to individuals who are unable to pay their tax debt in full, even with the option of an installment agreement, and who have exhausted all other viable payment alternatives.
Qualification Criteria for an Offer in Compromise
Not all taxpayers are eligible to participate in the OIC program. The IRS takes into account various factors when assessing eligibility, including:
Financial capacity: Your income, expenses, assets, and liabilities will be scrutinized by the IRS to ascertain whether you can repay your tax debt in its entirety. Reasonable Collection Potential (RCP): The IRS...