Many taxpayers apply for offer in compromise in the hope of reducing a significant portion of their tax debts. Under this program, the Internal Revenue Service (IRS) may agree to settle for an amount less than your tax dues. However, the chances of acceptance of an offer in compromise are very less. More than half of the applications are rejected by the IRS. A major reason for this rejection is improper filling of forms and income details. It is therefore highly recommended that a taxpayer fill in a sample offer in compromise form before trying an actual form. Sample offer in compromise forms are available from a variety of sources such as tax professionals, publications, and websites. The basic form required for applying for an offer in compromise is form 656. This form calls for taxpayer's personal details, income sources, assets, and investments. The filling of the form requires careful consideration. Any wrong or exaggerated information may lead to the cancellation of the application. Form 433-A is also to be filled in equally carefully. This particular form, called Collection Information Statement, contains entries related to the taxpayer's bank accounts, investments, and even details regarding the spouse. Remember that the IRS inspects the disclosures made in form 433-A very closely. Taxpayers usually consult tax professionals such as tax lawyers, certified public accountants (CPA), or enrolled agent (EA) before applying for an offer in compromise. These professionals provide sample offer in compromise forms and help in filling them and declaring your assets and investments. They also carry out negotiations with the IRS during the application process. Many tax professionals lack the expertise required for this complicated job. The estimates and details proposed by a tax professional should therefore be crossed-checked or sent for second opinion. |
