How to Use an Offers of Compromise with the Internal Revenue Service

Utilizing the IRS Offer in Compromise Program to Get Your Taxes Back on Track

The Internal Revenue Service's Latest Changes to the their Offer of Compromise Program is more detailed than it has been in the past. The IRS Offer of Compromise Program was initially established decades ago and the latest changes do much to strengthen and formalize their program.

Requirements to submit an Offer of Compromise to the IRS include:

-A $150 non-refundable processing fee is required to be submitted with your IRS Offer in Compromise.

-An payment made with the Offer of at least twenty percent of the Offer amount is required to be submitted with the Offer. It can be applied against either the taxpayers outstanding tax debt, or if a taxpayer prefers, returned to them, in the event the Offer is declined. The payment forwarded will not be refunded if the Offer is accepted by the IRS and then the balance of the monies will be due.

-Payment of Offer monies are generally best to be made within 30 days of notification of acceptance. Although tax law allows for payment terms of up to five installments and over a two year/twenty-four month maximum, it is generally best, for all concerned, to pay the amount within the amount of time as specified on the Offer Form.

-Required or statutory collection activity can be suspended while an Offer is pending and under review. However, if the IRS feels that the Offer in Compromise is being submitted primarily for the purposes of delaying collection efforts, the IRS may, in its discretion continue with its collection efforts.

-As part of the Offer, taxpayers are required to stay current on all tax filings and payments for a period of five years as an agreement of the Offer settlement. Taxpayers, who fail to do so, will have their previously abated taxes, interest and penalties reinstated and collection efforts by the IRS resumed. This includes all personal tax filings and payments and all corporate tax filings and payments that a taxpayer is responsible for.

-Form 656 is to be used by taxpayers to submit the actual individual or corporate Internal Revenue Service Offer in Compromise along the $150 non-refundable processing fee.

-Form 433A Collection Information Statement for Wage Earners and Self-Employed Individuals is the form that individual taxpayers utilize to submit their Offer information to the IRS along with required documentation and attachments.

- Form 433B Collection Information Statement for Businesses is the form that corporate taxpayers utilize to submit their Offer information to the IRS along with required documentation and attachments.

Georgia also has an Offer in Compromise Application Fee Information Sheet to help taxpayers, powers of attorney and tax advocates through the process.

The Internal Revenue Service Offer in Compromise process is complicated and technical and should only be attempted with the services of a Certified Public Accountant/CPA who is experienced and well-versed in these matters. To read more about this process visit articles:

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John Dillard is a Christian Speaker/Author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (An Atlanta CPA firm) and for his latest book Overcoming Life's 9/11's: Job's Journey and to learn about his ministry visit http://www.john-dillard.com/