Form 656-B - Offer In Compromise Booklet Page 7
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32Step 3 – Fill out Form 433-B (OIC),
Fill out Form 433-B (OIC) if the business is a Corporation, Partnership, LLC
Collection Information Statement
classified as a corporation, single member LLC taxed as a corporation, or other
for Businesses
multi-owner/multi-member LLC. This will be used to calculate an appropriate offer
amount based on the business assets, income, expenses, and future earning
potential. If the business has assets that are used to produce income (for example,
a tow truck used in the business for towing vehicles), the business may be allowed
to exclude equity in these assets.
Step 4 – Attach Required
You will need to attach supporting documentation with Form(s) 433-A (OIC) and
Documentation
433-B (OIC). A list of the documents required will be found at the end of each
form. Include copies of all required attachments. Do not send original
documents.
Step 5 – Fill out Form 656, Offer
Fill out Form 656. The Form 656 identifies the tax years and type of tax you would
in Compromise
like to compromise. It also identifies your offer amount and the payment terms.
Step 6 – Include Initial Payment
Include a personal check, cashier's check, or money order for your initial payment
and $186 Application Fee
based on the payment option you selected (20% of the offer amount for a lump
sum cash offer or the first month's payment for a periodic payment offer).
Include a separate personal check, cashier's check, or money order for the
application fee ($186).
Make both payments payable to the “United States Treasury.” All payments must
be made in U.S. dollars.
If you meet the Low Income Certification guidelines, the initial payment and
application fee are not required.
Step 7 – Mail the Application
Make a copy of your application package and keep it for your records.
Package
Mail the application package to the appropriate IRS facility. See page 27,
Application Checklist, for details.
Note: If you are working with an IRS employee, let him or her know you are
sending or have sent an offer to compromise your tax debt(s).
IMPORTANT INFORMATION
After You Mail Your Application
Promptly reply to any requests for additional information within the time frame
Continue to:
specified.
If you selected the Periodic Payment option, you must continue to make the
payments during consideration of your offer, unless you meet the Low Income
Certification. Failure to reply timely or make monthly payments may result in the
return of your offer without appeal rights.
If your offer is accepted, you must continue to timely file all required tax returns
and timely pay all estimated tax payments and federal tax payments that become
due in the future. If you fail to timely file and timely pay any tax obligations that
become due within the five years after your offer is accepted (including any
extensions) your offer may be defaulted. If your offer is defaulted, you will be liable
for the original tax debt, less payments made, and all accrued interest and
penalties. An offer does not stop the accrual of interest and penalties. Please note
that if your final payment is more than the agreed amount by $50 or less the
money will not be returned but will be applied to your tax debt. If your final payment
is more than the agreed amount by more than $50, your money will be returned to
you.
In addition, your offer may be defaulted if you fail to promptly pay any tax debts
assessed after acceptance of your offer for any tax years prior to acceptance that
were not included in your original offer.
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