What are the requirements for an OIC?
Used the most current versions of Form 656, “Offer in Compromise,” and Forms 433-A and 433-B, “Collection Information Statements” . The most current versions are dated May 2001; Submitted the $150 application fee, or Form 656-A, “Income Certification for Offer in Compromise Application Fee,” with the Form 656; Filed all required federal tax returns; Filed and paid any required employment tax returns on time for the two quarters prior to filing the OIC, and is current with deposits for the quarter in which the offer in compromise was submitted; and Is not a debtor in a bankruptcy case. Taxpayers must comply with all federal tax filing and paying requirements for a period of five years following acceptance of their OIC, or until the OIC is paid in full, whichever is longer. This also includes making required estimated tax payments and federal tax deposits. How do I complete an OIC? First obtain a Form 656, Offer in Compromise package (Version 5/2001). The package includes information and
In order to be considered for an OIC, a taxpayer must: • Not be in bankruptcy; • Submit the $150 application fee or Form 656-A (PDF) Income Certification for Offer in Compromise Application Fee with the Form 656; • Pay 20 percent of the offer amount with Form 656, Offer in Compromise Application Fee, or include Form 656-A, Income Certification for Offer in Compromise Application Fee, if the taxpayer is making a “lump sum” offer; • Pay the first proposal installment with From 656, Offer in Compromise Application Fee, or include Form 656-A, Income Certification for Offer in Compromise Application Fee, if the taxpayer is making a “periodic payment” offer and pay additional installments when due while the IRS is evaluating the offer. A “lump sum ” offer is any offer of payments made in five or fewer installments. A “periodic payment” offer means any offer made in six or more installments. If the sole basis for the offer in compromise is doubt as to liability, the taxpayer does not have to
