The IRS released in April 2023 the most recent version of the Form 656-B, Offer in Compromise Booklet. Tax professionals should always download and use the most current version of this form to avoid processing delays. The booklet also includes the forms taxpayers must complete as part of the OIC process and is now available in Spanish. Offers in compromise let taxpayers settle their tax debts for less than the full amount they owe once they’ve exhausted all other payment options. The IRS will consider each taxpayer’s unique set of facts and circumstances before accepting an OIC.

Share this IRS Tax Tip with clients that explains the OIC process in detail including how to:

Avoid paying an OIC application fee if a taxpayer qualifies as low-income (as defined by Form 656).
Confirm if a taxpayer is eligible to file an OIC and calculate a preliminary offer amount using the OIC Pre-Qualifier Tool.
File an offer and what information to gather for completing the various forms by watching a how-to OIC video playlist series that’s now also available in Spanish and Simplified Chinese.

If you have questions, please reach out to us!