Fillable Form 656-L - Offer In Compromise (Doubt As To Liability) (Page 4 of 8) in pdf

Page 4

Examples of when you

You should only submit a doubt as to liability offer if you are unable to dispute the

should submit a Doubt as to

amount of tax the IRS claims you owe during the time allowed by the Internal

Liability Offer

Revenue Code or IRS guidelines.

Possible reasons for submitting a doubt as to liability offer in compromise include

the following: the examiner made a mistake interpreting the tax law; the examiner

failed to consider the evidence presented; new evidence is available to support a

change to the assessment. Below are some examples of when it may be

appropriate to submit an offer based on doubt as to liability.

Example 1: You were audited by the IRS. When this happened, you moved and

did not get the notification, or you suffered a disaster (such as books and records

were destroyed in a fire or other natural disaster) causing you to miss the meeting

with the auditor. The IRS disallowed all expenses and now you have a tax debt.

You discover the problem when you try to borrow some money and find that there

is a federal tax lien filed. You are unable to reconstruct your books and records,

but you can provide an explanation that supports reasonable doubt justifying a

reduction to a portion or all of your tax debt.

Example 2: You filed your tax return reporting stock options as valued by your

employer, which created a large tax liability including Alternative Minimum Tax

(AMT). You paid part of the tax debt, but could not pay the full amount owed. You

later discovered that the stocks were not worth as much as you originally reported.

This was due to fraudulent acts by the broker and/or your employer. You filed a

claim for a refund based on the reduced value of stock options. IRS told you that

the full amount of the tax debt had to be paid before they could consider your claim

and denied your claim for refund.

What if I agree with the tax

A doubt as to collectibility offer, is when you agree that you owe the taxes but you

debt but cannot afford to

cannot pay your tax debt in full. To be considered for a doubt as to collectibility

pay in full?

offer you must make an appropriate offer based on what the IRS considers your

true ability to pay. To request consideration under doubt as to collectibility, do not

use this form. You must complete a Form 656, Offer in Compromise, found in

Form

656-B, Offer in Compromise Booklet. You may get a Form 656-B by calling

the toll free number 1-800-829-1040, by visiting a local IRS office, or at

gov. For additional assistance, use the online Offer In Compromise Pre-Qualifier

tool at

IMPORTANT NOTE

You cannot submit an offer based on doubt as to liability (Form 656-L) and a

separate offer based on doubt as to collectibility (Form 656) at the same time.

It is in your best interest to resolve any disagreements about the validity of the tax

debt before filing an offer based on doubt as to collectibility. If you send both

kinds of offers at the same time, the doubt as to collectability offer will be

returned without further consideration. However, when the IRS returns the

doubt as to collectability offer to you, it will not return the application fee or

any payment you made with the offer, but will apply any payment to your

liability.

Where do I send my

You should mail the completed package to:

application?

Brookhaven Internal Revenue Service

COIC Unit

P.O. Box 9008

Stop 681-D

Holtsville, NY 11742-9008

656-L

Catalog Number 47516R

gov

Form

(Rev. 1-2018)

Form 656-L - Offer In Compromise (Doubt As To Liability) Page 4

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