Offer in Compromise 101

On July 8, 2009, the IRS released the new Form 656-B and has the revised Form 656, Offer in Compromise (OIC).

The new Form 656-B that was released contains all the forms that taxpayers are required  to complete to file an offer in compromise. The revised Form 656 has been revised to just four pages. The checklists,  worksheets, and instructions that were originally contained in Form 656 are now in Form 656-B. The two forms allow taxpayers, CPAs and other practitioners to have quick and easy access to the required application without having to print or scan through the OIC booklet.

The new Form 656-B contains all forms and instructions necessary to file an offer in comprimise, including:

• A checklist to determine if the offer can be processed.
• The revised Worksheet to Calculate an Offer Amount. The worksheet was revised to be used with the new Form 433-A (revision Jan. 2008).
• Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, revision Jan. 2008, and Form 433-B, Collection Information Statement for Businesses, revision Jan. 2008.
• A revised IRS Offer in Compromise Low Income Guidelines table based on the 2009 U.S. Department of Health and Human Services (HHS) standards.
• A revised Form 656-A, Income Certification for Offer in Compromise Application Fee and Payment.
• The Offer in Compromise Summary Checklist to ensure all necessary information has been reviewed and the appropriate forms have been completed.