To qualify for an ICO, the taxpayer must have filed all tax returns, received a bill for at least one tax debt included in the offer, have made all the estimated tax payments required for the current year and, if the taxpayer is a business owner with employees, must have made all required federal taxes deposits. Use this tool to see if you are eligible for a transaction offer (OIC). Enter your financial information and tax return status to calculate the amount of the preliminary offer. We made our final decision based on your full OCI request and our associated investigation.
This tool should only be used as a guide. While you can show that you can pay your liability in full, you can still submit a transaction offer and discuss your individual financial situation with the IRS. The taxpayer has sufficient assets to meet the tax obligation. The taxpayer provides full-time care and assistance to their dependent child, who has a serious long-term illness.
People with low incomes are completely exempt from the partial payment requirement. For commitment offer purposes, a low-income taxpayer is a person with an adjusted gross income that is less than 250% of the applicable poverty line. At that time, if your offer has been accepted, continue to make monthly payments until your balance is paid in full. If you offer to pay a lump sum, your down payment should be 20 percent of the total offer amount.
If you do it less than a month after the first offer, you don't need a new 656 form, just a letter that increases the amount of money you offer. However, in cases involving the deceased or their assets, an authorized executor must submit the offer along with evidence of their authority to do so. If the taxpayer states that they will file a bankruptcy petition during the investigation of the offer, the IRS must determine the likelihood of filing for bankruptcy and what impact the potential filing would have on their ability to collect. Failure to comply with the requirements set out above for any of the options will lead to the determination that the offer cannot be processed.
If the taxpayer attaches a partial payment to the offer, the fee will apply to the tax liability. If you qualify for the program and your offer is too low, the IRS will allow you to update your offer. If you make a transaction offer based on the second or third reason, the IRS will consider other factors. Finally, it is usually the person authorized to file a refund request on behalf of the taxpayer who would also have the authority to submit a commitment offer for the taxpayer.
If the taxpayer decides to make a lump sum offer, 20 percent of the offer must be submitted with the application. The small offer that the IRS accepts will depend on your financial situation, and you'll need to disclose it in great detail on Form 433-A (for salaried workers and the self-employed) or 433-B (for companies). When deciding if the offer is reasonable, the IRS will consider whether the taxpayer has previously participated in bankruptcy proceedings or if it is possible to settle any tax liability. The extension means that taxes collected within 270 days plus the time during which the offer is pending are non-refundable.
Find the forms for submitting an application and step-by-step instructions in Form 656-B, commitment offer brochure in PDF.