Step 4: Completing Form 656 Offer in Compromise

If you are looking for IRS tax help, perhaps you have thought about submitting an offer in compromise. Before you submit your offer, you should know that there are specific steps you need to take. This is...

Step 4: Completing Form 656 Offer in Compromise

Form 656 his 11 sections. And we won't go over all of them here. But there are some general guidelines you should be aware of.

1. Filing jointly and filing separately are different things. The paperwork, application fees and down payments are different.

2. Have the social security numbers of all persons submitting an offer. Or, if the offer is from a business, you will need the Employee Identification Number (EIN) from the business -- as well all other businesses in which you have an ownership interest.

3. The type of tax liability you owe, as well as the tax year of period you are being penalized can be found on the Notice of Federal Tax Lien. This information will make a difference in the paperwork you need to fill out and the fees required.

4. Keep your paperwork together. Several documents need to be filled out before your offer can be considered. If they are not kept together, your offer will be rejected, and you will lose your application fee.

5. Worksheets are available to help you calculate your Offer In Compromise. With the help of your accountant and lawyer fill them out before you make your offer.

6. If you don't think you will be able to pay your tax liabilities, you'll need to fill out Form 433-A (if you are an individual tax payer) or Form 433-B (if the offer is for a business or corporation).

You must explain your special circumstances there. No exceptions.

7. Live IRS tax help is available toll free at 1-800-829-1040