Get the up-to-date IRS Form 656-B, Offer in Compromise Instructions 2025 now

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The 'Offer in Compromise Booklet for Individuals' provides guidance for individuals unable to pay their California income tax liabilities. It outlines eligibility criteria, required documentation, and the application process for submitting an Offer in Compromise (OIC) to the Franchise Tax Board (FTB). The booklet details the evaluation factors considered by FTB, such as ability to pay and asset value, and explains the implications of submitting an OIC, including potential collection activity and collateral agreements. It serves as a comprehensive resource for taxpayers seeking relief from tax debts.

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What is the downside of Offer in Compromise?

The cons include: With this method, you are able to reduce what you owe. However, you also surrender your right to tax credits that you may have access to each year. This could mean your tax return could be lowered each year going forward. OIC does create a public record.

What happens if you default on an Offer in Compromise?

Offer in Compromise Guidelines When an OIC is declared to be in default, the agreement is no longer in effect and the IRS may then collect the amounts originally owed (minus any payments that you made when the OIC was not in default), plus interest and penalties.

What is the success rate of the IRS offer in the Compromise program?

The attorneys at Segal, Cohen Landis have an extremely high success rate in settling our clients tax debt via the IRS Offer in Compromise. Given that the IRS only accepts 24% of all submitted offers, it is advisable to consult a tax attorney with expertise in this area.

How much will the IRS usually settle for?

The IRS typically settles for an amount it believes you can realistically pay, taking into consideration your assets, income, monthly expenses, and savings. Its essential to provide thorough financial information to gauge an appropriate settlement figure.

Does an IRS offer in compromise hurt your credit?

While the IRS may review your credit history as part of their evaluation of your OIC, your credit score will not be impacted by your compromise application. In fact, its unlikely that credit services would have any idea that youve submitted anything at all, so you should be safe.

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What is the offer in compromise form 656b?

IRS Form 656-B is used by taxpayers interested in settling their tax debt for less than they owe. This is known as an Offer in Compromise (OIC).

How much should I offer the IRS in an offer in compromise?

Figuring out the optimal amount to offer the IRS is not easy. It takes a lot of experience to know where the sweet spot lies for any given case. In general though, you can start off with an estimate of 1 year worth of your disposable income and add to that any valuable assets you can sell for additional cash.

How to get IRS to accept offer in compromise?

You must provide a written statement explaining why the tax debt or portion of the tax debt is incorrect. In addition, you must provide supporting documentation or evidence that will help the IRS identify the reason(s) you doubt the accuracy of the tax debt.