Understanding IRS Form 656
IRS Form 656, also commonly known as the Offer in Compromise (OIC), is certainly not the simplest of tax documents to comprehend. As a nationwide tax relief company, Brightside Tax Relief consistently encounters clients who struggle to understand the specifics and implications of Form 656. What may initially seem like a complicated tax puzzle, can with the right information, become an effective tool for a more financially secure and stable future.
Simply put, this offer establishes an agreement between a taxpayer and the Internal Revenue Service (IRS) to settle a tax debt for less than the full amount owed. For taxpayers dealing with tax dilemmas, understanding and correctly filling out this form can be crucial in moving towards tax resolution.
Navigating the Basics of IRS Form 656
At the crux of it, IRS Form 656 is meant to bring relief to taxpayers who are genuinely unable to pay their tax debt. This form allows you, the taxpayer, to make an offer or a proposal to the IRS to settle your tax debt for less than what you owe. The benefit for you is obvious; however, the agreement also allows the IRS to recover at least a portion of the tax debt, ensuring that they are not entirely at a loss.
Let’s take a look at this process in a better light:
– Eligibility: Not every taxpayer qualifies for an offer in compromise. Only taxpayers who cannot pay their existing tax liability or for whom doing so leads to financial hardship are generally considered for an offer in compromise.
– Different Types of Offers: IRS Form 656 accommodates three different types of offers in compromise including Doubt as to Collectibility, Doubt as to Liability, and Effective Tax Administration.
– Settlement Amount: The settlement amount is based on the taxpayer’s income, assets, expenses, and future earning potential. It is calculated using Form 433-A for individuals or Form 433-B for businesses, both of which need to be submitted with Form 656.
Grabbing the Bull by the Horns: Filling Out Form 656
For many taxpayers, filling out tax forms can be a daunting task. Simplifying the process can make the difference between stress and success. Follow this step-by-step guide to begin filling out Form 656:
1. Start by reviewing the form’s instructions found in the Form 656 booklet. While this can be exhaustive, it helps you understand the requirements and procedures associated with an Offer in Compromise.
2. Submit the $205 application fee along with your initial payment.
3. Detail your offer based on your debt analysis and ability to pay.
4. Certify that you are up-to-date with all filing and payment requirements.
5. State the type of tax and the number of the tax period you are making the offer for.
6. Sign the form.
The Brightside Effect: Assisting in Navigating Form 656
Brightside Tax Relief understands the challenges taxpayers face while navigating the complexities of IRS Form 656. Over the years, we’ve witnessed the relief experienced by individuals and businesses when they successfully file this form and secure an Offer in Compromise from the IRS.
Our mission is to aid you in filing Form 656 in the most effective manner, ensuring a better understanding, ultimate accuracy, and faster response from the IRS. With our pool of tax experts, we simplify the complex process involved in filing Form 656, removing the guesswork and stress that so often accompany tax resolution.
Loading Up the Final Cannon: IRS Form 656 Conclusion
The Form 656 can seem convoluted initially, but it’s a crucial tool for taxpayers seeking relief from staggering tax debts. It’s the light at the end of the tunnel for many who have struggled for far too long under the burden of unmanageable tax debts. With expert guidance and assistance, the process of filling out IRS Form 656 becomes not just navigable, but potentially the first step towards a brighter, more manageable financial future.
Remember that your financial situation can improve, regardless of how bleak it may currently seem. Discover how Brightside Tax Relief can shed some light on your situation today. Understanding IRS Form 656 might be your first step towards tax resolution, and we’re here to guide you through every step of the journey.