IRS Practice Series: 6 Simple Steps to an Offer-in-Compromise: Completing Form 656 (Currently Unavailable)

Author: Eva Rosenberg

An Offer-in-Compromise (OIC) allows taxpayers to reach an agreement with the IRS to pay less than the total owed. You'll receive a detailed 6-step guide to requesting an OIC to achieve a reasonable settlement for your client.

Publication Date: June 2019

Designed For
Any proactive, current or prospective, Circular 230 practitioner that understands the IRS is ramping up the "close the tax gap". Tax practitioners who want to protect their existing clients from IRS' predatory collections action and grow their business into this rapidly expanding market.

Topics Covered

• Doubt as to Liability
• Audit reconsideration
• Innocent/injured spouse
• Forged return
• Doubt as to collectability
• Effective Tax Administration
• Valuing assets
• Minimize the required deposits
• Departure from IRS standards
• Collateral Agreements
• Requirements once OIC is accepted
• Strategies for OIC payments
• Appeals

Learning Objectives

• Differentiate which type of OIC is appropriate
• Recognize how to prepare the OIC and present the offer
• Identify functions of an IRS field team visiting employers who are delinquent on their payroll tax payments
• Identify the taxpayers role when it comes to Effective Tax Administration (ETA)
• Recognize if there is any way to get the IRS to accept the higher numbers, if your client's expenses are well over the National Standards
• Identify what you should do when sending documents to the IRS
• Describe the percentage of submitted Offers in Compromise (OICs) does the IRS accept (rounded to the nearest percentage)
• Recognize what level of tax liability will a taxpayer's file be turned over to Revenue Officers (ROs) in the field
• Differentiate reasons the IRS would even consider an OIC when they have the power to collect the money, attach assets, levy wages, and bank accounts
• Describe the three types of Offer in Compromise
• Recognize which forms are worked with during offers in compromise
• Identify which set of expenses the IRS must use when preparing the monthly income and expense statement on any version of Form 433
• Recognize acceptable negotiation strategies
• Describe conditions when you make a Lump Sum Offer
• Describe the maximum number of months of cash flow to take into account for an offer in compromise
• Recognize why we reduce the available cash from $4,994 to zero in assets

Level
Advanced

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
IRS Practice Series: Overview of Collection Issues and IRS Practice Series: 10 Steps to Resolving Collection Issues and IRS Practice Series: Hands-on Collections Workshop (or equivalent knowledge).

Advance Preparation
None.