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The IRS Form 656: A Comprehensive Guide by Brightside Tax Relief
Few things can cause as much stress as owing money to the IRS. But worry less because Brightside Tax Relief is here to guide you on possibly one of the most important forms in tax resolution – IRS Form 656. IRS Form 656 is designed to provide tax relief to individuals and businesses who are unable to pay their tax liability in full. It affords taxpayers a chance to settle their tax debts for less than the full amount they owe.
What Exactly is IRS Form 656?
IRS Form 656, often referred to as the Offer in Compromise (OIC), is a legal agreement between a taxpayer and the IRS. It paves the way for taxpayers to settle their tax debt for less than the total owed. This settlement can occur only if the IRS believes that the taxpayer cannot pay the full amount or if doing so would create financial hardship. This form is suitable for those whose tax situation is quite complex, and who can demonstrate that paying their total tax liability would lead to undesirable financial circumstances.
The Critical Components of IRS Form 656
The IRS Form 656 involves several components that taxpayers should be keenly aware of. They include:
– The Initial Offer Amount: This refers to the amount you propose to pay the IRS to settle your tax debt.
– The Payment Terms: You can choose to make your payment either as a lump sum or in periodic payments.
– Non-Refundable Payments: You are required to submit some non-refundable payments with Form 656, such as the initial payment and $205 application fee.
– Criteria for Eligibility: Not every taxpayer is eligible to file Form 656. You must meet certain conditions to do so.
Eligibility Criteria for Filing IRS Form 656
Before considering submitting an Offer in Compromise via Form 656, it is essential for taxpayers to understand the eligibility criteria. The IRS carefully evaluates each request which includes checking if:
– All required tax returns are filed.
– Any required estimated tax payments for the current year are paid.
– If you are a business owner, all required federal tax deposits for the current quarter are made.
In addition, it’s important to note that you aren’t eligible if you are in a current bankruptcy proceeding.
Completing Your IRS Form 656
Filling out Form 656 can be a bit intricate, owing to the total amount of information the IRS requires from the taxpayer. You need to give detailed information about your financial affairs, including assets, income, expenses, and equity. The IRS uses this information to assess your ability to pay. The IRS encourages applicants to use the Offer in Compromise Pre-Qualifier tool before completing and submitting the form. It provides a preliminary summary to determine if you are eligible to apply and gives an estimate for the offer amount.
Hence, it is crucial to review the instructions attached to the form at the official IRS website and consult with a tax professional for further guidance.
Understanding the Potential Outcomes of Your Offer
After submitting your completed IRS Form 656, there are three possible outcomes:
Rejection: If your offer does not meet the IRS’s criteria, it could be rejected. You can appeal the rejection within 30 days from the date of the letter.
Acceptance: If the IRS accepts your offer, you are required to meet all the terms of the agreement. Failing to do so could lead to reversal of the decision and you might have to pay the original amount.
Return: The IRS could return the offer without making a determination if they discover that you didn’t fulfill certain requirements like filing all necessary tax returns. This return is not subject to appeal.
Brightside Tax Relief Can Help with IRS Form 656
The process of filing IRS Form 656 can be daunting. Understanding the intricate requirements of the IRS is a challenging task. This is where the expertise of Brightside Tax Relief comes in. We handle the complex tax processes, fighting for the rights of taxpayers nationwide, making sure they get the tax relief they deserve.
Remember, it’s always a smart move to seek professional advice before engaging in any offer in compromise with the IRS. Brightside Tax Relief has a team of tax professionals standing by to help you navigate through the IRS Form 656. Let us help you achieve financial freedom from the weight of your tax debt once and for all.
Final Words on IRS Form 656
The road to financial freedom from tax liability starts with understanding IRS Form 656. The Offer in Compromise via Form 656 provides an opportunity to settle tax debts for less than you owe. But it is a complex process that involves detailed financial disclosure and careful consideration. Thus, it is highly advised to get professional help from an experienced tax relief company. Whether you’re looking to file Form 656 or you need assistance navigating through tax resolution, Brightside Tax Relief is the hand you need to hold. We understand how burdensome dealing with the IRS can be, but with the right support and guidance, we make the process painless and stress-free.
