Fillable Form 656-L - Offer In Compromise (Page 3 of 8) in pdf

Page 3

If you think your tax liability is

Then:

incorrect because:

of an audit

see Publication 3598, The Audit

Reconsideration Process

IRS created a tax return for you because

submit your correct, original tax return for

you did not file one

processing

items were not reported correctly on your

see the instructions for Form 1040X,

tax return or because IRS made an

Amended U.S. Individual Income Tax

adjustment on your return

Return

items were not reported properly on a tax

see the instructions for Form 843, Claim for

return, other than Forms 1040 or 1120, or

Refund and Request for Abatement

because IRS made an adjustment on your

return

you have reasonable cause to remove or

see Notice 746, Information About Your

reduce penalties IRS charged

Notice, Penalty and Interest

you believe additional interest IRS charged

see the instructions for Form 843, Claim For

you was due to IRS errors or delays

Refund and Request for Abatement

you believe you were not a responsible

you have the option to file Form 656-L or

person of a corporation and have been

see the instructions for Form 843, Claim For

assessed the trust fund portion of

Refund and Request for Abatement

employment taxes

you believe you should be considered an

see Publication 971, Innocent Spouse

“innocent spouse” for a joint income tax

Relief

return

you believe you should be considered an

See Form 8379, Injured Spouse Allocation

"injured spouse" for a joint income tax return

Note: A claim for injured spouse will not

be considered under doubt as to liability.

you dispute your worker classification

See Form SS-8, Worker Classification

Determination

Note: An SS-8 dispute will not be

considered under doubt as to liability.

Examples of when you

Generally, you will send in a doubt as to liability offer when you were unable to

should submit a Doubt as to

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

Liability Offer

Internal 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 make 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.

656-L

Catalog Number 47516R

Form

(Rev. 1-2016)

Form 656-L - Offer In Compromise Page 3

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