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Now that you’re ready to start your Offer in Compromise, there
are some things you need to know. There are some items that
you’ll need to gather to work through the Offer in Compromise. This checklist simplifies the list of things you need so you’ll be
more than ready to complete the forms.
Make Sure You Qualify
The first step in making sure you’re ready to file your Offer
in Compromise is double-checking to see that you qualify.
Have you filed all of the
tax returns you’re legally
required to file?
Has the IRS sent
you a bill for your
If you are required to make
estimated tax payments,
are your estimated tax
If you answer “No” to any of the questions above, you
aren’t eligible for an Offer in Compromise at this time.
Are you in an
Are you waiting for the
results of an innocent
Are you currently
If you answer “Yes” to any of the questions above, you aren’t eligible
for an Offer in Compromise until the proceeding is completed.
Are you unable to
pay your back taxes in
full, whether through
cash you already
have on hand or by
If you do have the
cash or assets on
hand to pay your tax
debt in full, would
that cause an undue
hardship for you?
Do you dispute
the back taxes?
You must be able to answer “Yes” to one of the questions above.
Get Your Information Together
Now that you know you qualify to request an Offer in Compromise, you’ll
need to get some financial and household information together. Make
sure you have documentation of all of these items available. You can use
documents such as bank statements, mortgage bills, and utility bills.
Here’s what you’ll need to know to complete the form:
The total cash you have in all accounts.
A list of all your investments, including the
value and any identifying information (such
as a VIN for vehicles).
All of your available credit.
A list of all of your assets, including any
amounts you owe and your equity.
The amount of your income, plus the
income of everyone who lives in your home.
The amount of all of your debt, including
credit cards, home mortgage, vehicle loans,
and anything else you owe.
Your average monthly household expenses,
including rent/mortgage, utilities, groceries,
child care, and anything else you purchase
for your household.
It’s a good idea to keep a list of
all your income and expenses for
three months before completing
Form 433-A. Income includes
everything you receive, such
as wages, Social Security, child
support, alimony, rental income,
etc. Expenses include everything
that’s directly related to your
job, career, or sustenance, but
nothing that isn’t. For example,
include food and clothing, but
don’t include your Netflix or other
entertainment bills. There is a list
in the Form 433-A instructions
that you can use as guidance
in calculating your household
Complete Form 433-A
Now that you’ve gathered all the information you need, you’ll
need to complete Form 433-A. This form documents all of
your financial information. The IRS uses this form to determine
whether they can collect your back taxes and whether they should
accept your offer in compromise.
Form 433-A is an eight-page form. This sounds daunting, but you’ve just collected all
the information you’ll need to fill it out. Here are the sections you’ll need to complete:
Personal and Household
Business Income and
Expenses (if applicable)
Attach Items to Form 433-A
The IRS does request supporting documentation. Make sure you
have copies of all the items you gathered before. See the list of
required supporting documentation in the IRS form instructions,
and attach all of those items to your form. This includes the
following, but see the form instructions for a complete list:
Copy of your
last tax return
Income (check stubs, etc.),
bank statements, and
credit card statements
for three months
all your assets
Proof of expenses (household,
transportation, health care,
etc.) for three months
Complete Form 656
Next, you’ll need to complete the actual Offer in Compromise
form, Form 656. On this form, you’ll include the following:
Your personal information
The reason you’re requesting
an Offer in Compromise
Requested payment terms
Read the offer terms and
sign the form
Designation of payment
Answer questions about where you’re
getting the money to pay for the offer
Your business information
(if you’re filing an Offer in
Compromise for the business)
Check Your Forms
Make sure you double-check both Form 433-A and Form
656 before you mail them. If any fields are blank, or if you’ve
written something in the wrong field, correct it. Even if your tax
preparer completed the form, read through it and make sure
everything is correct — remember, the IRS holds you responsible
for ensuring the accuracy of the information on the form.
Mail the Forms
Gather the forms, all your documentation, and your $186
application fee (make checks payable to ‘U.S. Treasury’),
and mail them to the correct address.
If you live in Alabama, Arkansas, Florida, Georgia,
Hawaii, Idaho, Kentucky, Louisiana, Mississippi,
North Carolina, New Mexico, Nevada, Oklahoma,
Oregon, Tennessee, Texas, Washington, or
Wisconsin, mail the forms to this address:
Memphis IRS Center COIC Unit
P.O. Box 30803
AMC Memphis, TN 38130-0803
If you live in Alaska, Arizona, California, Colorado,
Connecticut, Delaware, Iowa, Illinois, Indiana,
Kansas, Massachusetts, Maryland, Maine, Michigan,
Minnesota, Missouri, Montana, North Dakota,
Nebraska, New Hampshire, New Jersey, New York,
Ohio, Pennsylvania, Rhode Island, South Carolina,
South Dakota, Utah, Vermont, Virginia, Wyoming,
West Virginia, Washington, D.C., Puerto Rico, or in
another country, mail the forms to this address:
Brookhaven IRS Center COIC Unit
P.O. Box 9007
Holtsville, NY 11742-9007