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Preparing IRS Form 656
IRS Form 656 is a proposed contract for an offer in compromise. In Form 656, the taxpayer is agreeing to offer the IRS a certain amount of money. In exchange for the money, the IRS agrees to cancel the taxpayer's outstanding tax debts. This proposal may be accepted or rejected by the IRS, or returned to the taxpayer as unprocessable.

Offer in Compromise
By filing an Offer in Compromise, you are offering to pay less than the full amount of your tax debts to the Internal Revenue Service. The IRS, at its discretion, may accept less than full payment of your tax debts if there is doubt as to whether the IRS could ever collect the full amount of tax debt or if there is doubt as to whether you are actually liable for the tax debt.

Settling IRS Tax Debts
Taxpayers have several options for resolving their federal tax debts. They can request a monthly payment plan, submit an offer in compromise, or seek bankruptcy protection. I spoke with David A. Bauman, an enrolled agent, who works for JK Harris, about the advantages and disadvantages of filing an IRS Offer in Compromise.

Offer In Compromise
Preparing accurate and thorough IRS Form 433-A is a necessary and crucial step in submitting a successful Offer in Compromise application. Helpful tips provided for each section of Form 433A.