What Documentation is Required for an Offer in Compromise?

Understand what documentation and IRS forms will be required if you want to request an Offer In Compromise, which is a way of paying less than you owe.
What Documentation is Required for an Offer in Compromise?
An offer in compromise may sound like the deal of a lifetime. You put yourself in a lot of debt, but now have the chance to get out without paying what you owe. Even though this sounds too good to be true, it is a possibility if you meet the requirements set forth by the IRS. Before you get too excited and think that the IRS will accept any offer, you need to realize that there are many steps to take. Most importantly, you need to provide the IRS with the proper documentation.

As you start to think more about an offer in compromise you may realize that you are in over your head. At this point there is nothing wrong with calling a professional who has experience with submitting offers on the behalf of clients. It may cost you, but the time you will save is invaluable. Not to mention the fact that you can be 100 percent sure of the accuracy of the offer in compromise when you use a professional.

For an offer in compromise the IRS asks for full financial disclosure. In other words, they want to know everything about your finances. If they find money that you can liquidate to pay for your debt, your offer in compromise will be denied. For instance, if you owe $50k and have $50k in the bank, it only makes sense that the IRS will tell you to pay the debt in full.

In most cases, you will be asked to submit Forms 433-A, 433-B, and 656. Along with this, information on the following will be needed: mortgage, real estate deeds, bank statements dating back one year, sources of income and pay stubs, life insurance policies, other debts such as doctor bills, and proof of the cost of living expenses.

Simply put, the IRS wants a full picture of your financial situation before they decide to accept or deny your offer in compromise. Even if you supply all the right information, your offer can still be rejected.

If you are going to submit an offer in compromise to the IRS be prepared to provide plenty of documentation.
Offer In Compromise Settlement
Visit TaxDebtHelp.com today to get more detailed information on the documents, qualifications, and payments methods for an Offer In Compromise.

By Matt Robinson
Published: 10/26/2009
 
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