, renamed Income Certification for Offer in Compromise Application Fee and Payment.
Taxpayers meeting this criteria must submit Form 656-A
, Offer in Compromise Application Fee Instructions and Certification.
It includes Form 656-A
, Income Certification for OIC Application Fee, and a worksheet to help taxpayers determine whether they meet the income exception to the $150 fee; a checklist to help them determine whether they are eligible; a third-party designee section, which allows a person other than the taxpayer to discuss any additional information the IRS needs to process the offer; and a summary checklist that reduces the chance the IRS will return the application for omissions.
The $150 user fee must be attached to Form 656; if no fee is required, Form 656-A
, Income Certification of Offer in Compromise, must be attached.
Taxpayers seeking relief under the new hardship/equity guidelines must submit the new form 656-A
in addition to form 656 (the standard OIC form).
, An Explanation of Circumstances, should accompany Form 656 when there is an additional basis for compromise involving effective tax administration.
The IRS issued Form 656-A, Additional Basis for Compromise, using the new criteria, taxpayers should submit this form (along with Form 656, Offer in Compromise (the standard offer-in-compromise application)).
Form 656-A specifies that, before an offer in compromise will be considered, the Service must first determine that the taxpayer owes tax and that the taxpayer has sufficient assets or income (or both) to pay it.
Tax advisers should exercise caution before using Form 656-A, as it admits liability and ability to pay.