US Internal Revenue Service: f656 accessible

8/14/2019 US Internal Revenue Service: f656 accessible

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New legislation has created significant changes to the Offer in CompromiseProgram. Notice 1357 has been provided with the electronic version of theForm 656 in order to explain the new requirements for filing an offer incompromise.

If you need further information, you can visit our web site at www.irs.gov, or calltoll free at 1-800-829-1040.
http://www.irs.gov/http://www.irs.gov/


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IRSNotice 1357 (7-2006)

Changes due to TIPRA(Tax Increase Prevention andReconciliation Act of 2005)

Notification

Catalog Number 26373I

Department of the TreasuryInternal Revenue Service

www.irs.gov

The recently enacted TIPRA legislation mademajor changes to the requirements forsubmitting lump-sum and periodic-payment

offers. These changes became effective for alloffers submitted after July 15, 2006.

In addition to the $150 application fee:

You must also include 20% of your offer amount

if you propose a Cash or Lump-Sum Offer (ACash or Lump sum offer is an offer you propose to


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IRS

Form 656 (Rev. 7-2004)

Offer in

Compromise

Catalog Number 16728N

Department of the Treasury

Internal Revenue Service

www.irs.gov

Form 656

IMPORTANT! THIS BOOKLET CONTAINS INFORMATION THAT YOUNEED IN ORDER TO PREPARE A COMPLETE AND ACCURATE OFFERIN COMPROMISE. PLEASE READ THESE INSTRUCTIONS CAREFULLYBEFORE ATTEMPTING TO COMPLETE THE ENCLOSED FORMS.

CONTENTS What is an Offer in Compromise? ............................................................. 1 Step One: Is Your Offer in Compromise Processable? ......................... 2 Step Two: What We Need to Fully Evaluate Your Offer .......................... 3 Step Three: Determining the Amount of Your Offer ................................. 5 Step Four: Completing Form 656 ........................................................... 10

Privacy Act Notice ................................................................................. 12

Step Five: Offer in Compromise Application Fee ................................... 13 Step Six: Where You Need To Send Your Offer .................................... 14 Step Seven: What to Expect After the IRS Receives Your Offer ........... 15 Step Eight: Offer in Compromise Summary Checklist ........................... 17 Important Information You Need To Know Regarding the

Offer in Compromise ............................................................................... 18

Terms and Definitions ............................................................................. 19 Removable Forms Form 656, Form 433-A, Form 433-B, Offer

in Compromise (OIC) Application Fee Worksheet, and Form 656-A,Income Certification for Offer in Compromise Application Fee

Note: If you have any questions, please call our toll-free number at 18008291040. You can get forms

and publications by calling toll free at 18008293676 (1800TAXFORM), or by visiting your

local Internal Revenue Service (IRS) office or our website at www.irs.gov.


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What is anOffer in Compromise?

An Offer in Compromise (OIC) is anagreement between the taxpayer andthe government that settles a taxliability for payment of less than thefull amount owed.

The Service will generally accept an OICwhen it is unlikely that the tax liability canbe collected in full and the amount offeredreasonably reflects collection potential.

An OIC is a legitimate alternative todeclaring a case currently not collectible

or to a protracted installment agreement.The goal is to achieve collection of whatis potentially collectible at the earliestpossible time and at the least cost tothe government.

Note: A protracted installmentagreement is defined as beingone that extends beyondthe

period allowed under IRSissued guidelines.

The success of the Offer in Compromiseprogram will be assured only if taxpayers

make adequate compromise proposalsconsistent with their ability to pay and theService makes prompt and reasonabledecisions. Taxpayers are expected toprovide reasonable documentation toverify their ability to pay. The ultimategoal is a compromise which is in the bestinterest ofboth the taxpayer and theService. Acceptance of an adequateoffer will also result in creating for thetaxpayer an expectation of, and a freshstart toward, compliance with all futurefiling and payment requirements.

Doubt as to Collectibility. Doubtexists that you could everpay the fullamount of tax owed. Before the IRScan consider a doubt as to collectibilityoffer(absent special circumstances),the taxpayermust notbe able to paythe taxes in full either by liquidatingassets or through current installmentagreement guidelines. You mustsubmit the appropriate collectioninformation statement along withall required supporting documents.

Doubt as to Liability. This meansthat doubt exists that the assessed taxis correct. Do not use this reason ifthe sole basis for filing an offer isbecause you are unable to pay thetax liability. If you do not think thatyou owe the tax liability, then you maysubmit an OIC forDoubt as to Liability(see Item 6 on Form 656). You mustsubmit a detailed written statementexplaining why you believe you do notowe the tax that you want to compromise.You are not required to submit a collectioninformation statement if you aresubmitting an offer on this basis alone.

Effective Tax Administration (ETA).This means that the taxpayerdoes nothave any doubt that the tax is correctand there is no doubt that the fullamount of tax owed could be collected,but an exceptional circumstance existsthat would allow us to consider youroffer. To be eligible for compromise onthis basis, you must demonstrate thatthe collection of the tax would create an

economic hardship or would be unfairand inequitable. If you are requestingan ETA offer, you mustsubmit:

1. A collection information statementwith all appropriate attachments, and

2. A written narrative explaining yourspecial circumstances and whypaying the tax liability in full wouldcreate an economic hardship orwould be unfair and inequitable.

You mustalso attach appropriatedocumentation that will support yourrequest for an ETA offer such as proof

of unusual expenses that would causeyou economic hardship if the taxeswere collected in full.

The information in this package isdesigned to assist you in determiningif an offer in compromise is the rightpayment option for you, as well as guideyou through the process of completing acomplete offer in compromise applicationpackage. Please read and follow thedirections carefully!


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Step One: Is Your Offer in Compromise (OIC)"Processable?"(Note: The three questions below do not apply if youroffer is based only on doubt as to liability.)

STOP

PLEASE DO NOT GO ANY FURTHER WITHOUT FIRST DETERMINING WHETHER OR NOTYOU ARE ELIGIBLE TO HAVE YOUR OFFER IN COMPROMISE PROCESSED AT THIS TIME.

In order to determine whether or not you are eligible to have your offer in compromise processed, please answerthe 3 questions below:

YES NO

1. Do you currently have an open bankruptcy proceeding? You should contact your BankruptcyAttorney if you are not certain. If you are involved in an open bankruptcy proceeding, contactyour local IRS insolvency office. Any resolution of your outstanding tax liabilities generallymust take place within the context of your bankruptcy proceeding.

2. Do you have any unfiled federal tax returns that you are required to file? You must file alltax returns that you were legally required to file prior to submitting an offer in compromise.This includes but is not limited to: All Income Tax, Employment Tax, and Excise Tax returns, along with all required Partnership,

Limited Liability Corporations, or closely held Sub-Chapter S Corporation returns.

If you did not file a return for a specific year prior to submitting your OIC because you werenot legally required to file the return, then you must include a detailed explanation of yourcircumstances with your OIC.

3. If you are a business with employees, have you failed to timelymake any required

federal tax deposits for the current quarter and the two immediate preceding quarters?(If you have any untimely federal tax deposits for the above quarters or late filing of returns,then you must answer yes to this question.)

If you answered YES to any of the questions above, STOP HERE. You are not eligibleto have youroffer considered or processed at this time. If you answered NO to all of the questions above, then youmay be eligibleto have your offer considered and processed.

AdditionalRequirements

1. Offer in Compromise ApplicationFee Your offer must include the$150 application fee or a completedForm 656-A, Income Certification ofOffer in Compromise Application Fee,if you are requesting an exceptionof the fee because of your income.

Offers received without the $150 feeor a completed Form 656-A will notbe accepted for processing. Pleasesee Step 5 on Page 13 of thispackage for more information on theapplication fee and to determineif you qualify for the exception.

2. You mustuse the current versionsof Form 656, Offer in Compromise,and Form 433-A and Form 433-B,Collection Information Statements,which are contained in this package.

Individual or Self-Employedtaxpayers must use Form 433-A,Collection Information Statementfor Wage Earners andSelf-Employed Individuals.

Corporations and other businesstaxpayers must use Form 433-B,Collection Information Statementfor Businesses. We may alsorequire Form 433-A from corporateofficers or individual partners.

Offers received on outdatedforms or without the requiredinformation statements will notbe considered.


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Step Two: What We Need to Fully EvaluateYour Offer

1. COMPLETE AN ACCURATEFORM 656 Complete all applicableitems on Form 656, which is theofficial compromise agreement.You mustsign Form 656. If someoneother than yourself prepared theoffer package, then please see theinstructions in Step Four, Items 12and 13, found on Page 11 of thispackage. If your Form 656 wasprepared by an authorizedRepresentative, you mustincludea completed Form 2848, Powerof Attorney and Declaration ofRepresentative, with your offer.Detailed instructions for thecompletion of Form 656 arefound on Pages 10 and 11 ofthis package.

Common errors to avoid in completingForm 656:

The taxpayers name is missing.

The street address is missing orincomplete.

The social security number(SSN) oremployer identification number(EIN)is missing, incomplete, or incorrect.

The preprinted terms and conditionslisted on the Form 656 have beenaltered or deleted.

An offer amount or payment termis missing.

A required signature is missing.

2. COMPLETE AN ACCURATECOLLECTION INFORMATIONSTATEMENT (Form 433-A and/orForm 433-B) You mustprovidefinancial information when you submitoffers based on doubt as to collectibilityand effective tax administration. Wedo not require this information ifyour offer is based solely on doubtas to liability. You mustsend uscurrent information that reflects your

financial situation for the three monthsimmediately prior to the date yousubmitted your offer in compromise.Collection information statementsmustshow all of your assets andincome, even those unavailable tous through direct collection action,because you can possibly use themto fund your offer. The offer examinerneeds this information to evaluate youroffer and may ask you to update it orverify certain financial information.These formsmustbe filled in completely.We may return offer packages that areincomplete. Annotate items that donot apply to you with N/A. Provideall the information required tosupport your financial condition.Required items of documentation areclearly indicated on the collectioninformation statements with icons.

When only one spouse has a taxliability but both have incomes, onlythe spouse responsible for the tax debtis required to prepare the necessary

collection information statements.The responsible spouse shouldinclude onlyhis/her assets andliabilities on his/her collectioninformation statements. However,the income and expenses of theentire household is required on theircollection information statements.The entire household includes spouse,domestic partner, significant other,children, and others that contribute tothe household. This is necessary forthe IRS to evaluate the income andexpenses allocable to the liable taxpayer.

In States with community propertylaws, we require collection informationstatements from both spouses.We may also require financialinformation on the non-liable spouse,or cohabitant(s), for offer verificationpurposes, even when communityproperty laws do not apply.


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3. RESPOND PROMPTLY TOREQUESTS FOR ADDITIONALINFORMATION While we areevaluating your offer, we maycontact you for any information thatis missing, or requires clarification.Respond promptly to any requestsfor additional information. If wedo not receive this informationfrom you in a timely manner,we will not give your offer anyfurther consideration. It will bereturned to you, and you willforfeit the $150 application fee.

4. ESTIMATED TAX PAYMENTSMUST BE UP TO DATE FOR THECURRENT YEAR We will notprocess your offer to completion ifwe determine that your estimatedtax payments for the current yearsincome tax liability are not paid up todate. If we determine this to be thecase, you will have one opportunity tomake the required payments beforewe return your offer. If we return youroffer because you did not make theestimated tax payments, then your$150 application fee will be forfeited.


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Step Three: Determining the Amount ofYour Offer

Doubt as to Collectibility

Your offer amount must equal orexceed your reasonable collectionpotential amount. The informationprovided on the collection informationstatements (Form 433-A and Form433-B) assists us in determiningthe reasonable collection potential(RCP) of your tax liability. TheRCP equals the net equity of yourassets plus the amount we could

collect from your future income.If our financial analysis indicatesthat you have the ability to fully paythe tax liability, either immediatelyor through an installment agreement,unless special circumstances areinvolved, your offer will not beaccepted. You must offer anamount greater than or equal tothe RCP amount. All offer amountsmust exceed zero, including doubtas to liability offers.

If special circumstances cause you tooffer an amount less than the RCP, youmustcomplete Item 9, Explanation ofCircumstances, on Form 656, explainingyour situation. You mustalso attach toForm 656 any supporting documents tohelp support your special circumstances.Special circumstances may includefactors such as advanced age, seriousillness from which recovery is unlikely,or any other factors that impact upon

your ability to pay the total RCP andcontinue to provide for the necessaryliving expenses for you and your family.

If you are a wage earner or self-employedindividual, completion of the worksheeton Pages 8 and 9 will give you a goodestimate of what an acceptable offeramount may be. You will use theinformation on your Form 433-A tocomplete the worksheet.

Doubt as to Liability

Complete Item 9, Explanation ofCircumstances, on Form 656, explainingwhy, in your judgment, you do not owethe tax liability you want to compromise.Offer the correct tax, penalty, andinterest owed based on your judgmentin Item 7 on Form 656.

Effective Tax Administration (ETA)

Complete Form 433-A or Form 433-B,

as appropriate, and attach to Form 656.You mustcomplete Item 9, Explanationof Circumstances, on Form 656,explaining your exceptional circumstancesand why requiring payment of the taxliability in full would either create aneconomic hardship or would be unfairand inequitable. You mustalsoattach to Form 656 any documentsto help support your exceptionalcircumstances.


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Determine YourPayment Terms

There are three payment plans you andthe IRS may agree to:

Cash (paid in 90 days or less);

Short-Term Deferred Payment(more than 90 days, up to 24 months);

Deferred Payment (offers withpayment terms over the remainingstatutory period for collecting the tax).

Cash Offer

You must pay cash offers within 90 daysof a written notice of acceptance.

You should offer the realizable valueof your assets plus the total amountwe could collect over 48 months ofpayments (or the remainder of theten-year statutory period for collection,whichever is less).

Note: We require full payment ofaccepted doubt as to liabilityoffers at the time of mutualagreement of the correctedliability. If youre unable to paythe corrected amount, you mustalso request compromise onthe basis of doubt as tocollectibility.

Short-Term Deferred Payment Offer

This payment plan requires you to paythe offer within two years of acceptance.

The offer must include the realizablevalue of your assets plus the amountwe could collect over 60 months ofpayments (or the remainder of theten-year statutory period for collection,whichever is less).

You can pay the short-term deferredpayment plan in three ways:

Plan One

Full payment of the realizable valueof your assets within 90 days fromthe date we accept your offer, and

Payment within two years ofacceptance of the amount we couldcollect over 60 months (future income)or the remaining life of the collectionstatute, whichever is less.

Plan Two

Cash payment for a portion of therealizable value of your assets within90 days from the date we accept youroffer, and

The balance of the realizable valueplus the amount we could collect over60 months (future income) or theremaining life of the collection statute,whichever is less, within two years ofacceptance.

Plan Three

The entire offer amount in monthlypayments extending over a periodnot to exceed two years from dateof acceptance (e.g., four paymentswithin 120 days of acceptance).

For example, on a short-term deferredpayment total offer of $16,000, you mightpropose to pay your realizable value ofassets (e.g., $13,000) within 90 daysof acceptance and the amount of your

future income (e.g., $50 per month for60 months, or $3,000) over 6 monthlypayments of $500 each, beginning thefirst month after acceptance.

We may file a Notice of Federal TaxLien on tax liabilities compromisedunder short-term payment offers.


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Deferred Payment Offer

This payment plan requires you to paythe offer amount over the remainingstatutory period for collecting the tax.

The offer must include the realizablevalue of your assets plus the amount wecould collect through monthly paymentsduring the remaining life of the collectionstatute.

Using the worksheet on Pages 8 and 9,multiply the amount from Item 12,Box O, by the number of monthsremaining on the collection statute.

Add that amount to Item 11, Box N,and use the total as the basis for youroffer amount in Item 7 of Form 656.

You can pay the deferred payment planin three ways:

Plan One

Full payment of the realizable value of

your assets within 90 days from thedate we accept your offer, and

Your future income in monthlypayments during the remaining lifeof the collection statute

Plan Two

Cash payment for a portion of therealizable value of your assets within90 days from the date we accept youroffer, and

Monthly payments during the

remaining life of the collection statutefor both the balance of the realizablevalue and your future income

Plan Three

The entire offer amount in monthlypayments over the life of thecollection statute

For example, on a deferred paymentoffer with 7 years (84 months) remainingon the statutory period for collectionand a total offer of $25,000, you mightpropose to pay your realizable value ofassets (e.g., $10,000) within 90 daysand your future income (e.g., $179

per month for 7 years, or $15,000)in 84 monthly installments of $179.

Alternately, you could also pay thesame total $25,000 offer in 84 monthlyinstallments of $298.

Just as with short-term deferredpayment offers, we may file a Noticeof Federal Tax Lien on tax liabilitiescompromised under DeferredPayment Offers.

Note: The worksheet on Pages 8and 9 instructs wage earnersand self-employed individualshow to figure the appropriateamount for a Cash, Short-TermDeferred Payment, or DeferredPayment Offer.

Offer in Compromise Worksheet

Please see Pages 8 and 9.

Funding Your Offer

If you do not have the cash to pay youroffer amount immediately, you shouldbegin the process of exploring options tofinance your offer amount. Options you

may want to consider include liquidatingassets, obtaining a loan from a lendinginstitution, borrowing on your homeequity through a second mortgage orreverse mortgage, or borrowing fundsfrom family members or friends.


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yourrec

ords

8

Kee

pthisfor

Worksheet to Calculate an Offer AmountFor use by Wage Earners and Self-Employed Individuals.

Keep this worksheet for your recordDo not send to IRS.

Use this Worksheet tocalculate an offer amountusing information fromForm 433-A.

1. Enter total checking accounts from Item 11c A

2. Enter total other accounts from Item 12c

If less than 0 , enter 0

B

3. Enter total investments from Item 13d C

4. Enter total cash on hand from Item 14a D

5. Enter life insurance cash value from Item 16f E

6. Enter total accounts/notes receivable from Item 23m FSubtotal:Add boxes A through F =

G

7. Purchased Automobiles,Trucks, and Other Licensed Assets

Enter current valuefor each asset

Enter loan balancefor each asset

Individualasset value(if less than 0 ,enter 0 )

From line 18a $ x .8 = $ $ =

From line 18b $ x .8 = $ $ =

From line 18c $ x .8 = $ $ =

Subtotal =H

8. Real Estate



Individualasset value(if less than 0 enter 0 )

From line 20a $ x .8 = $ $ =

From line 20b $ x .8 = $ $ =

Subtotal =I

9. Personal Assets

Enter current value

for each assetEnter loan balancefor each asset

Individualasset value

(if less than 0 enter 0 )

From line 21b $ x .8 = $ $ =

From line 21c $ x .8 = $ $ =

From line 21d $ x .8 = $ $ =

From line 21e $ x .8 = $ $ =

Subtotal = J

From line 21a $ x .8 = $ $ =

Subtract $ 7040.00

Subtotal = K

10. Business Assets



Individual

asset value(if less than 0 ,enter 0 )

From line 22b $ x .8 = $ $ =

From line 22c $ x .8 = $ $ =

From line 22d $ x .8 = $ $ =

From line 22e $ x .8 = $ $ =

Subtotal = L

From line 22a $ x .8 = $ $ =

Subtract $ 3520.00

Subtotal = M


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yourreco

rds

9

Keepthisfor

11. Add amounts in Boxes G through M to obtain your total equity and assets = N

12. Enter amount from Item 34 $

Enter amount from Item 45 and subtract $

Net Difference = O

This amount would be available

to pay monthly on your tax liability.

If Box O is 0 or less, STOP. Usethe amount from Box N and to baseyour offer amount in Item 7 of Form656. Your offer amount must equor exceed (*) the amount shown iBox N.

13a.

If you will pay the offer amountin 90 days or less (i.e., cash offer):

Enter amountfrom Box O $

Multiply by x 48(or the number of monthsremaining on the ten-yearstatutory period for collection,whichever is less)

=P

Enter amountfrom Box N +

Q

Add amountsin Box P andBox Q

=R

Use the amount

from Box R to base

your offer amount

in Item 7 of Form

656.

Note: Your offer

amount must equal

or exceed (*) the

amount shown in

Box R.

13b.

If you will pay the offer amount in morethan 90 days but less than 2 years(i.e.,short-term deferred payment offer):

Enter amountfrom Box O $

Multiply by x 60(or the number of monthsremaining on the ten-yearstatutory period for collection,whichever is less)

= S

Enter amountfrom Box N + T

Add amountsin Box S andBox T

= U

Use the amount

from Box U to base

your offer amount

in Item 7 of Form

656.

Note: Your offer

amount must equal

or exceed (*) the

amount shown in

Box U.

Note: Do not compute your offer amount using 13a or 13b if yourstatute expiration date(s) is less than 5 years from the date of youroffer. Instead, refer to page 5 under Deferred Payment Offer options1 through 3.

Unless you are submitting an offer under effective tax administration or doubt as to collectibilitywith special circumstances considerations, as described on page 4.*


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Step Four: Completing Form 656, Offer in Compromise

We have included two Offer in Compromise forms. Use one form to submit yourOffer inCompromise. You may use the other form as a worksheet and retain it for your personalrecords.

Note: If you have any questions about completing this form, you may call toll free at18008291040 or visit your local IRS office or our website at www.irs.gov.We may return your offer if you dont follow these instructions.

Item 1: Enter your name and home or businessstreet address. Show both names on a

joint offer for joint liabilities. You alsoshould include a mailing address if it isdifferent from your street address.

If you owe a liability

Jointly with another person and both ofyou agree to submit an offer, send onlyone Form 656, Offer in Compromise, andone $150 application fee (or Form 656-A,if applicable).

By yourself(such as employmenttaxes), and other liabilities with another

person (such as income taxes), but onlyyou are submitting an offer, then listalltax liabilities on one Form 656and submit one $150 application fee(or Form 656-A, if applicable).

By yourself and another one jointly,and both of yousubmit an offer, thenyou must show alltax liabilities on yourForm 656 and submit one$150 applicationfee (or Form 656-A, if applicable).The other person should show onlythe joint tax liability on their Form 656and submit one $150 application fee(of Form 656-A, if applicable).

Item 2: Enter the social security number(s)for the person(s) submitting the offer.For example, enter the social security

number of both spouses when

submitting a joint offer for a joint taxliability. However, when only one spousesubmits an offer, enter only that spouses

social security number.

Item 3: Enter the employer identification numberfor offers from businesses.

Item 4: Show the employer identificationnumbers for all other businesses(excluding corporate entities) that you

own or in which you have an ownershipinterest.

Item 5: Identify your tax liability and enter the taxyear or period. Letters and notices fromus and Notices of Federal Tax Lien show

the tax periods for trust fund recoverypenalties.

Item 6: Check the appropriate box(es)describing the basis for your offer.

Doubt as to Liability offers require astatement describing in detail why youthink you do not owe the liability. CompleteItem 9, Explanation of Circumstances,explaining your situation.

Doubt as to Collectibility offers requireyou to complete a Form 433-A, CollectionInformation Statement for Wage Earnersand Self-Employed Individuals, if you arean individual taxpayer, or a Form 433-B,Collection Information Statement forBusinesses, if you are a corporation orother business taxpayer.

Note: Attach to the upper left corner of Form 656 the six (6) pages of the collectioninformation statement(s) and all related documents before you send it to us.


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Item 6 (contd) : Effective Tax Administration offersrequire you to complete a Form 433-A,Collection Information Statement forWage Earners and Self-EmployedIndividuals, if you are an individual

taxpayer, or a Form 433-B, CollectionInformation Statement for Businesses,if you are a corporation or other businesstaxpayer. Complete Item 9, Explanationof Circumstances.

Item 7: Enter the total amount of your offer(see Page 5, Determining the Amountof Your Offer). Your offer amountcannot include a refund we owe youor amounts you have already paid.

Check the appropriate payment box (cash,short-term deferred payment or deferred

payment see Page 6, Determine YourPayment Terms) and describe yourpayment plan in the spaces provided.

Item 8: It is important that you understandthe requirements listed in this section.Pay particular attention to Items 8(d)

and 8(g), as they address the futurecompliance provision and refunds.

Item 9: Explain your reason(s) for submittingyour offer in the Explanation ofCircumstances. You may attach

additional sheets if necessary.Include your name and SSN or EINon all attachments.

Item 10: Explain where you will get the funds topay the amount you are offering.

Item 11: 11(a) and 11(b) Signature of Taxpayer.

All persons submitting the offer must signand date Form 656. Include titles of

authorized corporate officers, executors,

trustees, Powers of Attorney, etc., whereapplicable.

Item 12: If someone other than the taxpayerprepared this Offer in Compromise, the

taxpayer should insert their name andaddress (if known)in Item 12.

Item 13: Paid Preparers Use Only.Self explanatory.

Please see the Privacy Act Notice onPage 13.

Item 14: If you want to allow the IRS to discussyour Offer in Compromise with a friend,family member, or any other person,including an individual you paid toprepare this form, check the Yes box inItem 14, Third Party Designee, on yourForm 656. Also enter the designeesname and phone number. Checkingthe Yes box allows the IRS to contactanother person and discuss with thatperson any additional information

the IRS needs to process your offer.This additional information may includeinformation about tax liabilities you failedto list in Item 5 on your Form 656 orreturns you have failed to file. If yourcontact person is an attorney, CPA, orenrolled agent and you wish to have themrepresent you regarding this offer, a Form2848, Power of Attorney and Declarationof Representative, should be completedand submitted with your offer.

Note: Staple in the upper left corner the four (4) pages of Form 656 before yousend it to us.


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Privacy Act Notice

We ask for the information on this form to carry out the internal revenuelaws of the United States. Our authority to request this information is section

7801. Our purpose for requesting the information is to determine if it is inthe best interests of the IRS to accept an offer in compromise. You are notrequired to make an offer in compromise; however, if you choose to do so,you must provide all of the taxpayer information requested. Failure toprovide all of the information may prevent us from processing your request.If you are a paid preparer and you prepared the Form 656 for the taxpayersubmitting an offer, we request that you complete and sign Item 13 onForm 656, and provide identifying information. Providing this informationis voluntary. This information will be used to administer and enforce the

internal revenue laws of the United States and may be used to regulatepractice before the Internal Revenue Service for those persons subjectto Treasury Department Circular No. 230, Regulations Governing the

Practice of Attorneys, Certified Public Accountants, Enrolled Agents,

Enrolled Actuaries, and Appraisers before the Internal Revenue Service.Information on this form may be disclosed to the Department of Justice for

civil and criminal litigation. We may also disclose this information to cities,states, and the District of Columbia for use in administering their tax laws,and to Federal and state agencies to enforce nontax criminal laws and tocombat terrorism. The authority to disclose information to combat terrorismexpired on December 31, 2003. However, legislation is pending that wouldreinstate this authority. Providing false or fraudulent information on this formmay subject you to criminal prosecution and penalties.


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Step Five: Offer in Compromise (OIC)Application Fee

What is an Offerin CompromiseApplication Fee?

When you submit an offer in compromise(OIC), the Internal Revenue Serviceexpends resources evaluating yourindividual financial condition. The OIC

application fee allows the InternalRevenue Service to recover a portionof the cost of processing your OIC.

How much isthe fee?

The application fee is $150 for eachForm 656 submitted. Do not sendcash. Please pay either by check ormoney order and make payable to the

United States Treasury. (See Offerin Compromise (OIC) Application FeeWorksheet.)

When is thefee due?

The application fee of $150 is due atthe time you submit your OIC forconsideration.

Do all OICsrequire this fee?

You must remit the application feealong with your Form 656, Offerin Compromise, unless:(1) Your OIC is based solely ondoubt as to liability (see Page 1 ofthis Offer in Compromise package), or(2) You certify that your total monthlyincome is at or below levels based onthe poverty guidelines established by the

U.S. Department of Health and HumanServices. (See Offer in Compromise(OIC) Application Fee Worksheet.)

The exception for taxpayers withincomes below these levels only appliesto individuals; it does not apply toother entities such as corporationsor partnerships.

How do Idetermine if I

qualify for theexception?

To determine if you qualify for theexception, please complete the

attached Offer in Compromise(OIC)Application Fee Worksheet.

Is theapplication feeever refunded?

If the Internal Revenue Service acceptsyour OIC based on effective taxadministration or special circumstances(see Pages 1 and 5, respectively, inthis Offer in Compromise package), thefee will be applied against the amountof the offer, or refunded to you if you

request. In addition, if your offer isdetermined to be not processable asdescribed on Page 2 of this Offer inCompromise package, then your $150application fee will be returned to youalong with your offer.

What happens ifI do not submitthe application

fee with my OICForm 656?

Except for the two situations describedabove under Do all OICs require thisfee? any OIC submitted without the

fee will be returned to you withoutfurther consideration.

Where do I call ifI have additionalquestions aboutOICs and theapplication fee?

If you have additional questions about anOIC or about the application fee, pleasecall toll free at 18008291040 or visitour website atwww.irs.gov.
http://www.irs.gov/http://www.irs.gov/http://www.irs.gov/http://www.irs.gov/


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Step Six: Where You Need to Send Your Offer

Where to File IF YOU RESIDE IN

The states of Alaska, Alabama, Arizona, California, Colorado, Hawaii, Idaho, Kentucky,Louisiana, Mississippi, Montana, Nevada, New Mexico, Oregon, Tennessee, Texas,Utah, Washington, Wisconsin or Wyoming,

AND

You are a wage earner, retiree, or aself-employed individual withoutemployees,

THEN MAIL

Form 656 and attachments to:

Memphis Internal Revenue ServiceCenter COIC UnitPO Box 30803, AMCMemphis, TN 38130-0803

AND

You are OTHER than a wage earner,retiree, or a self-employed individualwithout employees,

THEN MAIL


Memphis Internal Revenue ServiceCenter COIC UnitPO Box 30804, AMCMemphis, TN 38130-0804

IF YOU RESIDE IN

Arkansas, Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois,Indiana, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota,

Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, NorthDakota, Ohio, Oklahoma, Pennsylvania, Puerto Rico, Rhode Island, South Carolina,South Dakota, Vermont, Virginia, West Virginia or have a foreign address,

AND

You are a wage earner, retiree, or aself-employed individual withoutemployees,

THEN MAIL


Brookhaven Internal Revenue ServiceCenter COIC UnitPO Box 9007Holtsville, NY 11742-9007

AND

You are OTHER than a wage earner,retiree, or a self-employed individualwithout employees,

THEN MAIL


Brookhaven Internal Revenue ServiceCenter COIC UnitPO Box 9008Holtsville, NY 11742-9008


19/6615

Step Seven: What to Expect after the IRS ReceivesYour Offer

How WeConsiderYour Offer

An offer examiner will evaluate youroffer and may request additionaldocumentation from you to verifyfinancial or other information youprovide. The examiner will then makea recommendation to accept or rejectthe offer. The examiner may also

return your offer if you dont providethe requested information.

The examiner may decide that a largeroffer amount is necessary to justifyacceptance. You will have theopportunity to amend your offer.

AdditionalAgreements

When you submit certain offers, we mayalso request that you sign an additionalagreement requiring you to:

Pay a percentage of your future earnings.

Waive certain present or future taxbenefits.

Withholding

CollectionActivities

There are certain circumstances where

we will withhold collection activities whilewe consider your offer. We will not actto collect the tax liability:

While we investigate and evaluateyour offer.

For 30 days after we reject an offer.

While you appeal an offer rejection.

However, a Notice of Federal TaxLien may be filed at any time whileyour offer is being considered.

The above do not apply if we find any

indication that you submitted your offerto delay collection or cause a delaywhich will jeopardize our ability to collectthe tax.

If you currently have an installmentagreement when you submit an offer,you must continue making the agreedupon monthly payments while weconsider your offer.

If We AcceptYour Offer If we accept your offer, we will notifyyou by mail. When you receive youracceptance letter, you must:

Promptly pay any unpaid amountsthat become due under the termsof the offer agreement. You mustcomply with the payment termsspecified in the agreement in a timelymanner or your offer and agreementwill be in default.

Comply with all the terms andconditions of the offer, along withthose of any additional agreement.

Promptly notify us of any change ofaddress until you meet the conditionsof your offer. Your acceptance letterwill indicate the IRS office to contact ifyour address changes. Your notificationallows us to contact you immediatelyregarding the status of your offer.

We will release all Notices of Federal TaxLien when you satisfy the payment terms ofthe offered amount. For an immediate

release of a lien, you can submit certifiedfunds with a request letter to the addresson the acceptance letter.

Once your offer is accepted, not filingreturns or paying taxes when due couldresult in the default of an accepted offer(see Item 8(d) of Form 656 for the futurecompliance provision). If you default youragreement, we will reinstate the unpaidamount of the original tax liability, file aNotice of Federal Tax Lien on any taxliability without a filed notice, and resumecollection activities. The future complianceprovision applies to offers based on doubtas to collectibility. In certain cases,the future compliance provision mayapply to offers based on effective taxadministration.

We will not default your offer agreementwhen you have filed a joint offer withyour spouse or ex-spouse as long asyou have kept or are keeping all theterms of the agreement, even if yourspouse or ex-spouse violates the futurecompliance provision.


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Except for offers based on doubtas to liability, the offer agreementrequires you to forego certain refunds,and to return those refunds to us if theyare issued to you by mistake. Theseconditions are also listed on Form 656,Items 8(g) and 8(h). For example,

if your offer was accepted by the IRS inthe tax year 2004, the IRS would keepthe refund due to you with respect to thetax year 2004, which you would normallyreceive in calendar year 2005 (becausethe due date for filing the tax year 2004is April 15, 2005).

If We RejectYour Offer

Well notify you by mail if we reject youroffer. In our letter, we will explain ourreason for the rejection. We will alsokeep your $150 application fee. If youroffer is rejected, you have the right to:

Appeal our decision to the Office ofAppeals within thirty days from thedate of our letter. The letter willinclude detailed instructions on howto appeal the rejection.

Submit another offer with anotherapplication fee. You must increase anoffer weve rejected as being too lowwhen your financial situation remainsunchanged. However, you must

provide updated financial informationwhen your financial situation haschanged or when the original offer ismore than six months old.


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Step Eight: Offer in Compromise (OIC) SummaryChecklist

Below is a checklist of items that you should review and complete prior to submittingyour Form 656, Offer in Compromise. This checklist is solely for your benefit, so do notsubmit with your offer.

Did you answer YES to any ofthe three questions on Page 2?If you did, then please do notsubmit Form 656 because youare not eligible to have your offerconsidered at this time.

Have you properly completedForm 656, Offer in Compromise,

by following the instructions onPages 10 and 11?

The preprinted terms and conditionslisted on Form 656 have notchanged.

Are you using the most currentversions of Form 656, Form 433-A,and Form 433-B as instructed onPage 2.

You included your name (or names,if joint).

You included your social securitynumber(SSN) or employeridentification number(EIN) andit is accurate.

You included an offer amount(the amount must be greater thanzero) or payment term.

You signed the Form 656. If this isa joint Form 656, both spouses mustsign Form 656.

You either attached the applicationfee in the designated area on theForm 656 or attached the Form656-A certification, whichever isapplicable. If you attached Form656-A, then you mustcompletethe Offer in Compromise (OIC)

Application Fee Worksheet.

If your offer is based on doubtas to collectibility, you includedcomplete financial information(Form 433-A or Form 433-B, orboth) and all attachments.

You signed or initialed in all requiredplaces on Form 433-A and/orForm 433-B.

Your offer amount is greater thanor equal to the reasonable collectionpotential (RCP) as described onPage 5 and calculated on Page 9.

If applicable, are Items 12 and 14,on Form 656 completed?

If applicable, is Item 13 on Form 656completed and signed?

Have you properly identifiedwhere to file your Form 656 fromthe instructions on Page 14?

If you have any questions, please call our toll-free number at 18008291040.You can get forms and publications by calling toll free at 18008293676(1800TAXFORM), or by visiting your local Internal Revenue Service (IRS)office or our website at www.irs.gov.


22/6618

Important Information Regarding theOffer in Compromise (OIC)

Statute of Limitations for Collection isSuspended The statute of limitationsfor collection of a tax debt is suspendedwhile an OIC is pending, or beingreviewed. The Offer in Compromise ispending starting with the date an authorizedIRS employee determines the Form 656,Offer in Compromise, can be processedand signs the Form 656. The OIC remainspending until an authorized IRS employeeaccepts, rejects, returns, or acknowledgeswithdrawal of the offer in writing. If ataxpayer appeals an OIC that was rejected,

the IRS will continue to treat the OIC aspending until the Appeals Office accepts orrejects the OIC in writing.

Taxpayers Must File and Pay TaxesIn order to avoid defaulting an OIC onceit is accepted by the IRS, taxpayers mustremain in compliance in the filing andpayment of all required taxes for a periodof five years, or until the offered amountis paid in full, whichever is longer.Failure to comply with these conditionswill result in the default of the OIC andthe reinstatement of the tax liability.

Federal Tax Liens Are Not ReleasedIf there is a Notice of Federal Tax Lien onrecord prior to the OIC being submitted, thelien is not released until the terms of theoffer in compromise are satisfied, or untilthe liability is paid, whichever comes first.The IRS generally files a Notice of FederalTax Lien to protect the Governmentsinterest on deferred payment offers.This tax lien will be released when thepayment terms of the offer agreementhave been satisfied.

Effect of the Offer on the TaxpayersRefund The IRS will keep any refund,including interest due to the taxpayerbecause of overpayment of any tax orother liability, for tax periods extendingthrough the calendar year that the IRSaccepts the offer. The taxpayer may notdesignate an overpayment ordinarilysubject to refund, to which the IRSis entitled, to be applied to estimatedtax payments for the following year.This condition does not apply if theoffer is based on doubt as to liability.

Effect of the Offer on InstallmentAgreements and Levies The IRSwill keep all payments and credits made,received or applied to the total originaltax liability before submission of thisoffer. The IRS may keep any proceedsfrom a levy served prior to submissionof the offer, but not received at the timethe offer is submitted. The taxpayerunderstands that if they had an installmentagreement prior to submitting the offer,he/she must continue to make thepayments as agreed while this offer

is pending. Installment agreementpayments will not be applied againstthe amount offered.

Public Inspection Files for AcceptedOffer in Compromise Files The lawrequires IRS to make certain informationfrom accepted Offers in Compromiseavailable for public inspection and review.These public inspection files are locatedin your local IRS Territory Office. It isimportant to know that certain informationregarding your accepted Offer inCompromise may be publicly known.

Taxpayer Advocate Services If atanytime you feel that you need help inresolving a tax problem that has not beenresolved through normal channels or youare experiencing significant hardship, thenyou may contact our Taxpayer AdvocateService (TAS). To find more informationon TAS or to locate your local TAS office,call the nationwide TAS toll-free number1 877 777 4778, or visit our websiteatwww.irs.gov.

Low Income Taxpayer Clinic (LITC)

In addition, each taxpayer has a right torepresentation but not everyone canafford representation. The Low IncomeTaxpayer Clinic (LITC) was developed torepresent low income taxpayers beforethe IRS for free or for a minimal charge.You can learn about LITC by going toour website at www.irs.govand clickon Taxpayer Advocate Services, or youcan call the nationwide TAS toll-freenumber 1 877 777 4778.
http://www.irs.gov/http://www.irs.gov/http://www.irs.gov/http://www.irs.gov/


23/6619

Terms and Definitions

An understanding of the followingterms and conditions will help you toprepare offers based upon doubt asto collectibility or effective taxadministration.

Current Value The amount youcould reasonably expect from the saleof an asset today. Provide an accuratevaluation of each asset. Determinevalue from realtors, used car dealers,publications, furniture dealers, or otherexperts on specific types of assets.

Please include a copy of any writtenestimate with your Collection InformationStatement.

Expenses Not Generally Allowed We typically do not allow you to claimtuition for private schools, public orprivate college expenses, charitablecontributions, voluntary retirementcontributions, payments on unsecureddebts such as credit card bills, cabletelevision charges and other similarexpenses as necessary living expenses.However, we can allow these expenseswhen you can prove that they arenecessary for the health and welfare ofyou or your family or for the productionof income.

Future Income We generallydetermine the amount we could collectfrom your future income by subtractingnecessary living expenses from yourmonthly income over a set number ofmonths. For a cash offer, you must offerwhat you could pay in monthly paymentsover forty-eight months (or the remainderof the ten-year statutory period forcollection, whichever is less). For ashort-term deferred offer, you must offerwhat you could pay in monthly paymentsover sixty months (or the remainderof the statutory period for collection,whichever is less). For a deferredpayment offer, you must offer what youcould pay in monthly payments duringthe remaining time we could legallyreceive payments.

Necessary Expenses The allowablepayments you make to support you andyour familys health and welfare and /orthe production of income. This expenseallowance does not apply to businessentities. Publication 1854, How to Preparea Collection Information Statement (Form433-A), explains the National StandardExpenses and gives the allowableamounts. We derive these amountsfrom the Bureau of Labor Statistics (BLS)Consumer Expenditure Survey. We alsouse information from the Bureau of the

Census to determine local expensesfor housing, utilities, and transportation.

Note: If the IRS determines that thefacts and circumstances ofyour situation indicate thatusing the scheduled allowanceof necessary expenses isinadequate, we will allow you anadequate means for providingbasic living expenses.However, you must providedocumentation that supportsa determination that usingnational and local expensestandards leaves you aninadequate means of providingfor basic living expenses.

Quick Sale Value (QSV) The amountyou could reasonably expect from thesale of an asset if you sold it quickly,typically in ninety days or less. Thisamount generally is less than currentvalue, but may be equal to or higher,based on local circumstances.

Realizable Value The quick salevalue amount minus what you owe to asecured creditor. The creditor must havepriority over a filed Notice of Federal TaxLien before we allow a subtraction fromthe assets value.

Reasonable Collection Potential (RCP) The total realizable value of yourassets plus your future income. The totalis generally your minimum offer amount.


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25/66

Form 656 (Rev. 7-2004)

Offer in Compromise


Department of the Treasury


www.irs.gov

AttachApplicationFee (check ormoney order)

here.

Item 1 Taxpayers Name and Home or Business Street Address

Name

Name

Street Address

City State ZIP Code

Mailing Address (if different from above)

Street Address

City State ZIP Code

Item 2 Social Security Numbers

(a) Primary

(b) Secondary

Item 3 Employer Identification Number(included in offer)

Item 4 Other Employer Identification Numbers (not includedin offer)

Item 5 To: Commissioner of Internal Revenue Service

I/We (includes all types of taxpayers) submit this offer tocompromise the tax liabilities plus any interest, penalties, additionsto tax, and additional amounts required by law (tax liability) for the

tax type and period marked below: (Please mark an X in the boxfor the correct description and fill-in the correct tax period(s),adding additional periods if needed).

1040/1120 Income Tax Year(s)

941 Employers Quarterly Federal Tax Return Quarterlyperiod(s)

940 Employers Annual Federal Unemployment (FUTA) TaxReturn Year(s)

Trust Fund Recovery Penalty as a responsible person of(enter corporation name)

,for failure to pay withholding and Federal InsuranceContributions Act Taxes (Social Security taxes), for period(s)ending .

Other Federal Tax(es) [specify type(s) and period(s)]

Note: If you need more space, use another sheet entitledAttachment to Form 656 Dated .Sign and date the attachment following the listing ofthe tax periods.

Item 6 I/We submit this offer for the reason(s) checked below:

Doubt as to Liability I do not believe I owe this tax.You must include a detailed explanation of the reason(s) whyyou believe you do not owe the tax in Item 9.

Doubt as to Collectibility I have insufficient assets andincome to pay the full amount. You must include a completeCollection Information Statement, Form 433-A and/or Form 433-B.

Effective Tax Administration I owe this amount and havesufficient assets to pay the full amount, but due to my exceptionalcircumstances, requiring full payment would cause an economichardship or would be unfair and inequitable. You must include acomplete Collection Information Statement, Form 433-A and/orForm 433B and complete Item 9.

Item 7

I/We offer to pay $ (must be more than zero).Complete item 10 to explain where you will obtain the funds to make

this offer.

Check onlyone of the following:

Cash Offer (Offered amount will be paid in 90 days or less.)

Balance to be paid in: days from writtennotice of acceptance of the offer.

10, 30, 60, or 90

Short-Term Deferred Payment Offer (Offered amount paid inMORE than 90 days but within 24 months from written noticeof acceptance of the offer.)

$________________within_____________days (not more than 90 See Instructions Section, Determine Your Payment Terms)from written notice of acceptance of the offer; and/or

beginning in the month after written notice of acceptanceof the offer $________________on the ___________day of each

month for a total of ____________months. (Cannot extend more than24 months from written notice of acceptance of the offer.)

Deferred Payment Offer (Offered amount will be paid overthe remaining life of the collection statute.)

$________________within_____________days (not more than90 See Instructions Section, Determine Your Payment Terms)from written notice of acceptance of the offer; and

beginning in the first month after written notice of acceptance ofthe offer $________________on the ___________day of each monthfor a total of ____________months.

Form 656IRS RECEIVED DATEIRS

DATE RETURNED

_________________________________________________

_________________________________________________

_________________________________________________

_________________________________________________

_________________________________________________

_________________________________________________

______________________________________________

____________________________________________________

____________________________________________________

_________________________________________________________________________

_____________________________________________________________________________________________

__________________________________________________

_______________________________________________________________________________

____________________________________________

___________________________________________________________

________________

_________

____________________________________

_________________


26/66

Item 8 By submitting this offer, I/we haveread, understand and agree to the followingconditions:

(a) I/We voluntarily submit all payments madeon this offer.

(b) The IRS will apply payments made underthe terms of this offer in the best interestof the government.

(c) If the IRS rejects or returns the offer or I /wewithdraw the offer, the IRS will return anyamount paid with the offer. However, I/weunderstand the application fee will be keptby the IRS. If I/we agree in writing, IRS willapply the amount paid with the offer to theamount owed. If I/we agree to apply thepayment, the date the IRS received the

offer remittance will be considered the dateof payment. I/We understand that the IRSwill not pay interest on any amount I/wesubmit with the offer.

(d) I/We will comply with all provisions ofthe Internal Revenue Code relating tofiling my/our returns and paying my/ourrequired taxes for 5 years or until theoffered amount is paid in full, whicheveris longer. In the case of a jointly submittedoffer to compromise joint tax liabilities,

I/we understand that default withrespect to the compliance provisionsdescribed in this paragraph by one partyto this agreement will not result in thedefault of the entire agreement. Thedefault provisions described in Item 8(n)of this agreement will be applied onlyto the party failing to comply withthe requirements of this paragraph.This provision does not apply to offersbased on Doubt as to Liability.

(e) I/We waive and agree to the suspension ofany statutory periods of limitation (timelimits provided for by law) for the IRSassessment or collection of the tax liabilityfor the periods identified in Item 5. I/Weunderstand that I/we have the right not towaive these statutory periods or to limit thewaiver to a certain length or to certainissues. I/We understand, however, that the

IRS may not consider this offer if I /werefuse to waive the statutory periods forassessment or if we provide only a limited

waiver. I/We understand that the statute oflimitations for collection will be suspendedduring the period an offer is consideredpending by the IRS (paragraph 8(m) defines

pending). The amount of any Federal taxdue for the periods described in Item 5may be assessed at any time prior to theacceptance of this offer or within one yearof the rejection of this offer.

(f) The IRS will keep all payments and creditsmade, received or applied to the total originaltax liability before submission of this offer.The IRS may keep any proceeds from a levyserved prior to submission of the offer,but not received at the time the offer issubmitted. If I/we have an installmentagreement prior to submitting the offer,I/we must continue to make the paymentsas agreed while this offer is pending.Installment agreement payments will notbe applied against the amount offered.

(g) As additional consideration beyond theamount of my/our offer, the IRS will keep

any refund, including interest, due to me/us because of overpayment of any tax or

other liability, for tax periods extending

through the calendar year that the IRSaccepts the offer. I/We may notdesignate an overpayment ordinarily

subject to refund, to which the IRS isentitled, to be applied to estimated tax

payments for the following year. This

condition does not apply if the offer is

based on Doubt as to Liability.

(h) I/We will return to the IRS any refundidentified in (g) received after submissionof this offer. This condition does not applyto offers based on Doubt as to Liability.

(i) The IRS cannot collect more than the fullamount of the tax liability under this offer.


27/66

(j) I/We understand that I/we remainresponsible for the full amount of the tax

liability, unless and until the IRS acceptsthe offer in writing and I/we have met all

the terms and conditions of the offer. TheIRS will not remove the original amount of

the tax liability from its records until I/we

have met all the terms of the offer.

(k) I/We understand that the tax I/we offerto compromise is and will remain a tax

liability until I/we meet all the termsand conditions of this offer. If I/wefile bankruptcy before the terms and

conditions of this offer are completed,any claim the IRS files in the bankruptcy

proceedings will be a tax claim.

(l) Once the IRS accepts the offer inwriting, I/we have no right to contest,

in court or otherwise, the amount of thetax liability.

(m) The offer is pending starting with the

date an authorized IRS official signs this

form. The offer remains pending until anauthorized IRS official accepts, rejects,returns or acknowledges withdrawal ofthe offer in writing. If I/we appeal an IRS

rejection decision on the offer, the IRS willcontinue to treat the offer as pending untilthe Appeals Office accepts or rejects the

offer in writing. If I/we dont file a protestwithin 30 days of the date the IRS notifies

me/us of the right to protest the decision,

I/we waive the right to a hearing beforethe Appeals Office about the offer in

compromise.

(n) If I/we fail to meet any of the terms andconditions of the offer and the offerdefaults, then the IRS may:

I immediately file suit to collect the entire

unpaid balance of the offer

I immediately file suit to collect an amountequal to the original amount of the tax

liability as liquidating damages, minus anypayment already received under the termsof this offer

I disregard the amount of the offer and applyall amounts already paid under the offeragainst the original amount of the tax liability

I file suit or levy to collect the originalamount of the tax liability, without furthernotice of any kind.

The IRS will continue to add interest, as Section

6601 of the Internal Revenue Code requires,on the amount the IRS determines is due afterdefault. The IRS will add interest from the datethe offer is defaulted until I/we completely satisfythe amount owed.

(o) The IRS generally files a Notice of FederalTax Lien to protect the Governments intereston deferred payment offers. Also, the IRSmay file a Notice of Federal Tax Lien duringthe offer investigation. This tax lien will bereleased when the payment terms of theoffer agreement have been satisfied.

(p) I/We understand that the IRS employeesmay contact third parties in order to respondto this request and I/we authorize the IRS tomake such contacts. Further, by authorizingthe Internal Revenue Service to contactthird parties, I/we understand that I will notreceive notice, pursuant to section 7602(c)of the Internal Revenue Code, of third partiescontacted in connection with this request.

(q) If doubt as to collectibility and/or effective tax

administration are checked in Item 6 above,I/we are offering to compromise all the taxliabilities assessed against me/us as of thedate of this offer and under the taxpayeridentification numbers listed in Items 2 and/or3 above. I/We authorize the IRS to amendItem 5, above, to include any assessedliabilities we failed to list on Form 656.


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Item 9 Explanation of Circumstances

I am requesting an offer in compromise for the reason(s) listed below:

Note: If you are requesting compromise based on doubt as to liability, explain why you dont believe you owe the tax.If you believe you have special circumstances affecting your ability to fully pay the amount due, explain your situation.You may attach additional sheets if necessary. Please include your name and SSN or EIN on all additional sheets orsupporting documentation.

Item 10 Source of Funds

I/We shall obtain the funds to make this offer from the following source(s):

Item 11 Mandatory Signature(s)

If I/We submit this offer on a substitute form, I/we affirm that thisform is a verbatim duplicate of the official Form 656, and I/weagree to be bound by all the terms and conditions set forth in theofficial Form 656.

Under penalties of perjury, I declare that I have examined thisoffer, including accompanying schedules and statements, andto the best of my knowledge and belief, it is true, correct andcomplete.

11(a) Signature of Taxpayer

Date

11(b) Signature of Taxpayer

Date

For Official Use Only

I accept the waiver of the statutory period of limitations on assessmentfor the Internal Revenue Service, as described in Item 8(e).

Signature of Authorized Internal Revenue Service Official

Title

Date

Item 12 If this application was prepared by someone other than the tapayer, please fill in that persons name and address below.

Name:

Address:(if known)

Item 13

PaidPreparersUse Only

Preparerssignature

Date Check ifself-employed

Preparers CAF no. or PTIN

Firms name (oryours if self-employed),address, and ZIP code

EIN

Phone no. ( )

Item 14

Third PartyDesignee

Do you want to allow another person to discuss this offer with the IRS? Yes. Complete the following. No

Designeesname

Phoneno.

( )

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_________________________________________________

_________________________________________________

______________________________________________________________________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________


29/66

Form 656

Offer in Compromise

AttachApplicationFee (check ormoney order)

here.

Item 1 Taxpayers Name and Home or Business Street Address

Name

Name

Street Address

City State ZIP Code

Mailing Address (if different from above)

Street Address

City State ZIP Code

Item 2 Social Security Numbers

(a) Primary(b) Secondary

Item 3 Employer Identification Number(included in offer)

Item 4 Other Employer Identification Numbers (not includedin offer)

Item 5 To: Commissioner of Internal Revenue Service

I/We (includes all types of taxpayers) submit this offer tocompromise the tax liabilities plus any interest, penalties, additionsto tax, and additional amounts required by law (tax liability) for the

tax type and period marked below: (Please mark an X in the boxfor the correct description and fill-in the correct tax period(s),adding additional periods if needed).

1040/1120 Income Tax Year(s)

941 Employers Quarterly Federal Tax Return Quarterlyperiod(s)

940 Employers Annual Federal Unemployment (FUTA) TaxReturn Year(s)

Trust Fund Recovery Penalty as a responsible person of(enter corporation name)

,for failure to pay withholding and Federal InsuranceContributions Act Taxes (Social Security taxes), for period(s)ending .

Other Federal Tax(es) [specify type(s) and period(s)]

Note: If you need more space, use another sheet entitledAttachment to Form 656 Dated .Sign and date the attachment following the listing ofthe tax periods.

Item 6 I/We submit this offer for the reason(s) checked below:

Doubt as to Liability I do not believe I owe this tax.You must include a detailed explanation of the reason(s) whyyou believe you do not owe the tax in Item 9.

Doubt as to Collectibility I have insufficient assets andincome to pay the full amount. You must include a completeCollection Information Statement, Form 433-A and/or Form 433-B.

Effective Tax Administration I owe this amount and havesufficient assets to pay the full amount, but due to my exceptionalcircumstances, requiring full payment would cause an economichardship or would be unfair and inequitable. You must include acomplete Collection Information Statement, Form 433-A and/orForm 433B and complete Item 9.

Item 7

I/We offer to pay $ (must be more than zero).Complete item 10 to explain where you will obtain the funds to make

this offer.

Check onlyone of the following:

Cash Offer (Offered amount will be paid in 90 days or less.)

Balance to be paid in: days from writtennotice of acceptance of the offer.

10, 30, 60, or 90

Short-Term Deferred Payment Offer (Offered amount paid inMORE than 90 days but within 24 months from written noticeof acceptance of the offer.)

$________________within_____________days (not more than 90 See Instructions Section, Determine Your Payment Terms)from written notice of acceptance of the offer; and/or

beginning in the month after written notice of acceptanceof the offer $________________on the ___________day of each

month for a total of ____________months. (Cannot extend more than24 months from written notice of acceptance of the offer.)

Deferred Payment Offer (Offered amount will be paid overthe remaining life of the collection statute.)

$________________within_____________days (not more than90 See Instructions Section, Determine Your Payment Terms)from written notice of acceptance of the offer; and

beginning in the first month after written notice of acceptance ofthe offer $________________on the ___________day of each monthfor a total of ____________months.

IRS RECEIVED DATE

DATE RETURNED

IRSDepartment of the Treasury


www.irs.gov

Form 656 (Rev. 7-2004)


_________________________________________________

_________________________________________________

_________________________________________________

_________________________________________________

_________________________________________________

_________________________________________________

______________________________________________

____________________________________________________

________________

___________________________________________

_______________________________________________________________________________

____________________________________________________

_________________________________________________________________________

__________________________________________________

__________________________________________________

____________________________________________

___________________________________________________________

_________

____________________________________

_________________


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Item 8 By submitting this offer, I/we haveread, understand and agree to the followingconditions:

(a) I/We voluntarily submit all payments madeon this offer.

(b) The IRS will apply payments made underthe terms of this offer in the best interestof the government.

(c) If the IRS rejects or returns the offer or I/wewithdraw the offer, the IRS will return anyamount paid with the offer. However, I/weunderstand the application fee will be keptby the IRS. If I/we agree in writing, IRS willapply the amount paid with the offer to theamount owed. If I/we agree to apply thepayment, the date the IRS received the

offer remittance will be considered the dateof payment. I/We understand that the IRSwill not pay interest on any amount I /wesubmit with the offer.

(d) I/We will comply with all provisions ofthe Internal Revenue Code relating tofiling my/our returns and paying my/ourrequired taxes for 5 years or until theoffered amount is paid in full, whicheveris longer. In the case of a jointly submittedoffer to compromise joint tax liabilities,

I/we understand that default withrespect to the compliance provisionsdescribed in this paragraph by one partyto this agreement will not result in thedefault of the entire agreement. Thedefault provisions described in Item 8(n)of this agreement will be applied onlyto the party failing to comply withthe requirements of this paragraph.This provision does not apply to offersbased on Doubt as to Liability.

(e) I/We waive and agree to the suspension ofany statutory periods of limitation (timelimits provided for by law) for the IRSassessment or collection of the tax liabilityfor the periods identified in Item 5. I/Weunderstand that I/we have the right not towaive these statutory periods or to limit thewaiver to a certain length or to certainissues. I/We understand, however, that the

IRS may not consider this offer if I/we

refuse to waive the statutory periods for

assessment or if we provide only a limited

waiver. I/We understand that the statute oflimitations for collection will be suspendedduring the period an offer is considered

pending by the IRS (paragraph 8(m) definespending). The amount of any Federal tax

due for the periods described in Item 5

may be assessed at any time prior to theacceptance of this offer or within one yearof the rejection of this offer.

(f) The IRS will keep all payments and creditsmade, received or applied to the total original

tax liability before submission of this offer.The IRS may keep any proceeds from a levyserved prior to submission of the offer,

but not received at the time the offer issubmitted. If I/we have an installmentagreement prior to submitting the offer,

I/we must continue to make the paymentsas agreed while this offer is pending.

Installment agreement payments will notbe applied against the amount offered.

(g) As additional consideration beyond theamount of my/our offer, the IRS will keepany refund, including interest, due to me/

us because of overpayment of any tax or

other liability, for tax periods extendingthrough the calendar year that the IRSaccepts the offer. I/We may not

designate an overpayment ordinarilysubject to refund, to which the IRS is

entitled, to be applied to estimated taxpayments for the following year. Thiscondition does not apply if the offer is

based on Doubt as to Liability.

(h) I/We will return to the IRS any refundidentified in (g) received after submission

of this offer. This condition does not applyto offers based on Doubt as to Liability.

(i) The IRS cannot collect more than the fullamount of the tax liability under this offer.


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(j) I/We understand that I/we remainresponsible for the full amount of the tax

liability, unless and until the IRS acceptsthe offer in writing and I/we have met all

the terms and conditions of the offer. The

IRS will not remove the original amount ofthe tax liability from its records until I/wehave met all the terms of the offer.

(k) I/We understand that the tax I/we offerto compromise is and will remain a tax

liability until I/we meet all the terms

and conditions of this offer. If I/wefile bankruptcy before the terms and

conditions of this offer are completed,any claim the IRS files in the bankruptcyproceedings will be a tax claim.

(l) Once the IRS accepts the offer inwriting, I/we have no right to contest,

in court or otherwise, the amount of thetax liability.

(m) The offer is pending starting with the

date an authorized IRS official signs this

form. The offer remains pending until anauthorized IRS official accepts, rejects,

returns or acknowledges withdrawal of

the offer in writing. If I/we appeal an IRS

rejection decision on the offer, the IRS willcontinue to treat the offer as pending untilthe Appeals Office accepts or rejects the

offer in writing. If I/we dont file a protestwithin 30 days of the date the IRS notifies

me/us of the right to protest the decision,

I/we waive the right to a hearing beforethe Appeals Office about the offer in

compromise.

(n) If I/we fail to meet any of the terms andconditions of the offer and the offerdefaults, then the IRS may:

I immediately file suit to collect the entireunpaid balance of the offer

I immediately file suit to collect an amountequal to the original amount of the tax

liability as liquidating damages, minus anypayment already received under the termsof this offer

I disregard the amount of the offer and applyall amounts already paid under the offeragainst the original amount of the tax liability

I file suit or levy to collect the originalamount of the tax liability, without furthernotice of any kind.

The IRS will continue to add interest, as Section

6601 of the Internal Revenue Code requires,on the amount the IRS determines is due afterdefault. The IRS will add interest from the datethe offer is defaulted until I/we completely satisfythe amount owed.

(o) The IRS generally files a Notice of FederalTax Lien to protect the Governments intereston deferred payment offers. Also, the IRSmay file a Notice of Federal Tax Lien duringthe offer investigation. This tax lien will bereleased when the payment terms of theoffer agreement have been satisfied.

(p) I/We understand that the IRS employeesmay contact third parties in order to respondto this request and I/we authorize the IRS tomake such contacts. Further, by authorizingthe Internal Revenue Service to contactthird parties, I/we understand that I will notreceive notice, pursuant to section 7602(c)of the Internal Revenue Code, of third partiescontacted in connection with this request.

(q) If doubt as to collectibility and/or effective tax

administration are checked in Item 6 above,I/we are offering to compromise all the taxliabilities assessed against me/us as of thedate of this offer and under the taxpayeridentification numbers listed in Items 2 and/or3 above. I/We authorize the IRS to amendItem 5, above, to include any assessedliabilities we failed to list on Form 656.


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Item 9 Explanation of Circumstances

I am requesting an offer in compromise for the reason(s) listed below:

Note: If you are requesting compromise based on doubt as to liability, explain why you dont believe you owe the tax.If you believe you have special circumstances affecting your ability to fully pay the amount due, explain your situation.You may attach additional sheets if necessary. Please include your name and SSN or EIN on all additional sheets orsupporting documentation.

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

Item 10 Source of Funds

I/We shall obtain the funds to make this offer from the following source(s):

_______________________________________________________________________________________________________________

_______________________________________________________________________________________________________________

Item 11 Mandatory Signature(s)

If I/We submit this offer on a substitute form, I/we affirm that thisform is a verbatim duplicate of the official Form 656, and I/weagree to be bound by all the terms and conditions set forth in theofficial Form 656.

Under penalties of perjury, I declare that I have examined thisoffer, including accompanying schedules and statements, andto the best of my knowledge and belief, it is true, correct andcomplete.

11(a) Signature of Taxpayer

Date

11(b) Signature of Taxpayer

Date

For Official Use Only

I accept the waiver of the statutory period of limitations on assessmentfor the Internal Revenue Service, as described in Item 8(e).

Signature of Authorized Internal Revenue Service Official

Title

Date

_________________________________________________

_________________________________________________

______________________________________________________________________________________________________

_____________________________________________________

_____________________________________________________

_____________________________________________________

Item 12 If this application was prepared by someone other than the tapayer, please fill in that persons name and address below.

Name:

Address:(if known)

Item 13

PaidPreparersUse Only

Preparerssignature

Date Check ifself-employed

Preparers CAF no. or PTIN

Firms name (oryours if self-employed),address, and ZIP code

EIN

Phone no. ( )

Item 14

Third PartyDesignee

Do you want to allow another person to discuss this offer with the IRS? Yes. Complete the following. No

Designeesname

Phoneno.

( )


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www.irs.gov


ourrecor

ds

Form 433-A (Rev. 5-2001)

Collection Information Statement for Wage Earnersand Self-Employed Individuals

Page 1 of 6

Keepthiscopy

fory

Complete all entry spaces with the most current data available.

Important! Write N/A (not applicable) in spaces that do not apply. We may require additional informationto support N/A entries.

Failure to complete all entry spaces may result in rejection or significant delay in the resolution of your account.

Section 1Personal

Information

1. Full Name(s)

Street Address

City State Zip

County of Residence

How long at this address?

1a. HomeTelephone ( )

Best Time To Call:

(Enter Hour)am pm

2. Marital Status:

Married Separated

Unmarried (single, divorced, widowed)

3. Your Social Security No.(SSN) 3a. Your Date of Birth (mm/dd/yyyy)

4. Spouses Social Security No. 4a. Spouses Date of Birth (mm/dd/yyyy)

5. Own Home Rent Other (specify, i.e. share rent, live with relative)

6. List the dependents you can claim on your tax return: (Attach sheet if more space is needed.)

First Name Relationship Age Does this personlive with you?

No Yes

No Yes

No Yes

No Yes

First Name Relationship Age Does this personlive with you?

Check this box

when all spaces inSect. 1 are filled in.

Section 2Your

BusinessInformation

7. Are you or your spouse self-employed or operate a business? (Check Yes if either applies)

No Yes If yes, provide the following information:

7a. Name of Business

7b. Street Address

City State Zip

7c. Employer Identification No., if available :

7d. Do you have employees? No Yes

7e. Do you have accounts/notes receivable? No Yes

If yes, please complete Section 8 on page 5.AttachmentsATTACHMENTS REQUIRED: Please include proof of self-employment income for the prior 3months (e.g., invoices, commissions, sales records, income statement).

Check this boxwhen all spaces inSect. 2 are filled inand attachmentsprovided.

Section 3Employment

Information

8. Your Employer

Street Address

City State Zip

Work telephone no. ( )

May we contact you at work? No Yes

8a. How long with this employer?

8b. Occupation

9. Spouses Employer

Street Address

City State Zip

Work telephone no. ( )

May we contact you at work? No Yes

9a. How long with this employer?

9b. Occupation

Attachments

ATTACHMENTS REQUIRED: Please provide proof of gross earnings and deductions for the past3 months from each employer (e.g., pay stubs, earnings statements). If year-to-date informationis available, send only 1 such statement as long as a minimum of 3 months is represented.

Check this box

when all spaces inSect. 3 are filled inand attachmentsprovided.

Section 4Other

IncomeInformation

10. Do you receive income from sources other than your own business or your employer? (Check all that apply.)

Pension Social Security Other (specify, i.e. child support, alimony, rental)

Attachments

ATTACHMENTS REQUIRED: Please provide proof of pension/social security/other income for thepast 3 months from each payor, including any statements showing deductions. If year-to-dateinformation is available, send only 1 such statement as long as a minimum of 3 months isrepresented.

Check this boxwhen all spaces inSect. 4 are filled inand attachmentsprovided.

Section 5 begins on page 2(Rev. 5-2


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eepthiscop

Collection Information Statement for Wage Earners and Self-Employed Individuals

Page 2 of 6

Form 433-A

K

f

y

oryourre

cords

Name SSN

Section 5Banking,Investment,Cash, Credit,and LifeInsuranceInformation

Complete all

entry spaces

with the most

currentdata

available.

11. CHECKING ACCOUNTS. List all checking accounts. (If you need additional space, attach a separate sheet.)

Type ofAccount

Full Name of Bank, Savings & Loan,Credit Union or Financial Institution

BankRouting No.

BankAccount No.

CurrentAccount Balanc

11a. Checking Name

Street Address

City/State/Zip

$

11b. Checking Name

Street Address

City/State/Zip

$

11c. Total Checking Account Balances $

12. OTHER ACCOUNTS. List all acounts, including brokerage, savings, and mo

Documents

US Internal Revenue Service: f656 accessible