Unveiling Form656: A Vital Tool in Tax Relief
In modern times, the complexities related to tax payments and negotiations can sometimes become overwhelming for individuals and businesses alike. Form656, also known as “Offer in Compromise,” provides an essential solution towards reducing your boggling tax debt. As a nationwide tax relief company, Brightside Tax Relief aims to provide insight into this critical solution and its in-depth working mechanism.
Purpose of Form656: Why It is Crucial
An integral part of the Internal Revenue Service (IRS), the primary purpose of Form656 is to allow taxpayers a chance to settle their tax debt for an amount less than they owe. It serves as an agreement between the taxpayer and IRS, providing an avenue for making affordable payments to settle outstanding tax liabilities.
The significant benefits of Form656 include:
– Enable Taxpayers to Clear Their Outstanding Debts: It provides an opportunity for taxpayers who cannot pay their entire tax debt in a lump sum.
– Long-term Financial Stability: By paying a lesser amount of debt, taxpayers can ensure their financial stability in the long run.
Eligibility Criteria for Form656
While Form656 brings a unique tax relief opportunity, not every taxpayer is eligible for its usage. Before proceeding with this IRS compromise offer, it is important to understand if your situation meets the IRS’s eligibility criteria.
To begin with, all of the following must apply to the taxpayer:
– They have filed all tax returns.
– They have received a bill for at least one tax debt included on their offer.
– They are not in an open bankruptcy proceeding.
Additionally, acceptable reasons for using Form656 include:
– Doubt as to Liability: When the taxpayer believes the assessed tax debt is incorrect.
– Doubt as to Collectibility: If the taxpayer believes they will never manage to pay off the tax debt in full.
– Effective Tax Administration: When paying the tax would create financial hardship or would seem unjust.
Process of Using Form656
Form656 involves a thorough process that you must follow correctly to achieve desired results. After verifying your eligibility, you need to complete and submit Form656, along with the necessary documentation and fees. Here is an overview of the Form656 process:
– Complete the Form: Fill out Form656 completely and accurately, using the Form656-B, Offer in Compromise Booklet from the IRS as your guide.
– Document Your Finances: Fill out Form433-A (for individuals) or Form 433-B (for businesses) to present your financial situation.
– Pay the Initial Payment: The IRS requires an initial payment along with your application, depending on the type of payment option you’ve chosen.
– Wait for the IRS Response: The IRS will review your application and decide whether to accept your offer.
Best Practice While Using Form656
Form656 necessitates a strategic and well-informed approach to ensure success. Here are some best practices to consider when filing for an Offer in Compromise:
– Seek Professional Guidance: As a company specializing in tax relief, Brightside Tax Relief highly recommends getting professional advice to guide you through this process.
– Ensure Accurate Completion: Ensure Form656 is filled out completely and accurately to avoid potential errors which may result in rejection.
– Keep Up with Future Tax Responsibilities: While Form656 provides relief from past tax debts, it’s vital to keep up with all future tax payments to remain in good standing with the IRS.
In conclusion, Form656 represents an empowering negotiation tool for taxpayers amidst challenging times. However, its successful use hinges on the correct understanding and execution of the process. As a respected tax relief entity, Brightside Tax Relief remains committed to assisting you in navigating this potential lifesaver, governing hopes of a brighter financial tomorrow. Embrace Form656, free yourself from the undue tax debt, and tread your path towards financial freedom.