Offer in Compromise Application Cover Letter

OFFER IN COMPROMISE APPLICATION COVER LETTER

IRS FORM 656 SUBMISSION PACKAGE

TAXPAYER INFORMATION

Primary Taxpayer Name: [FULL LEGAL NAME]

Social Security Number: [SSN]

Spouse Name (if joint offer): [SPOUSE NAME]

Spouse SSN (if joint offer): [SPOUSE SSN]

Current Address:
[STREET ADDRESS]
[CITY, STATE ZIP]

Daytime Telephone: [PHONE NUMBER]

Email Address: [EMAIL]

Tax Periods at Issue: [LIST ALL TAX PERIODS]

Total Tax Liability: $[TOTAL AMOUNT OWED]

COVER LETTER

[DATE]

Internal Revenue Service
Centralized Offer in Compromise Unit
[SELECT APPROPRIATE ADDRESS:]

For residents of: AK, AZ, CA, CO, HI, ID, KY, MS, MT, NV, NM, OR, TN, TX, UT, WA, WI, WY
Mail to:
Internal Revenue Service
Centralized Offer in Compromise
P.O. Box 39012
Ogden, UT 84409

For residents of all other states and DC:
Mail to:
Internal Revenue Service
Centralized Offer in Compromise
P.O. Box 638
Memphis, TN 38101-0638

Re: Offer in Compromise Application
Taxpayer(s): [NAME(S)]
Social Security Number(s): [SSN(S)]
Tax Periods: [PERIODS]
Offer Amount: $[PROPOSED AMOUNT]

Dear Offer in Compromise Unit:

Enclosed please find a complete Offer in Compromise application package submitted on behalf of the above-referenced taxpayer(s). This offer is submitted pursuant to IRC § 7122 and requests that the Internal Revenue Service accept $[AMOUNT] in full satisfaction of the taxpayer's outstanding federal tax liabilities totaling $[TOTAL LIABILITY].

SECTION 1: BASIS FOR OFFER

☐ Doubt as to Collectibility (DATC) - The taxpayer does not have the income or assets to pay the full amount owed within the remaining statutory collection period.

☐ Doubt as to Liability (DATL) - The taxpayer disputes the existence or amount of the assessed tax liability.

☐ Effective Tax Administration (ETA) - Although the taxpayer has the ability to pay, exceptional circumstances exist that would render full payment inequitable or cause economic hardship.

Narrative Explanation of Basis:
[PROVIDE A DETAILED EXPLANATION OF WHY THE IRS SHOULD ACCEPT THIS OFFER. INCLUDE SPECIFIC FACTS ABOUT THE TAXPAYER'S FINANCIAL SITUATION, HEALTH CONDITIONS, EMPLOYMENT STATUS, OR OTHER RELEVANT CIRCUMSTANCES.]

SECTION 2: OFFER CALCULATION SUMMARY

Reasonable Collection Potential (RCP) Calculation:

SECTION 3: PAYMENT TERMS SELECTED

☐ Lump Sum Cash Offer

• Offer Amount: $[AMOUNT]
• Required Initial Payment (20%): $[20% AMOUNT]
• Balance Due within 5 months of acceptance: $[BALANCE]
• Payment enclosed with application: $[AMOUNT ENCLOSED]

☐ Periodic Payment Offer

• Total Offer Amount: $[AMOUNT]
• Payment Terms: [NUMBER] months
• Monthly Payment Amount: $[MONTHLY AMOUNT]
• First Monthly Payment enclosed: $[AMOUNT]
• Payments will continue during IRS consideration

SECTION 4: APPLICATION FEE STATUS

☐ Application fee of $205 is enclosed (check/money order payable to "United States Treasury")

☐ Application fee waiver requested based on low-income certification

• Taxpayer's income is at or below 250% of federal poverty guidelines
• Form 656, Section 1, Low-Income Certification is completed

SECTION 5: ENCLOSURES CHECKLIST

Required Forms:

☐ Form 656, Offer in Compromise (signed and dated)
☐ Form 433-A (OIC), Collection Information Statement for Wage Earners and Self-Employed Individuals
☐ Form 433-B (OIC), Collection Information Statement for Businesses (if applicable)
☐ Application fee of $205 (or low-income waiver certification)
☐ Initial payment based on payment option selected

Required Supporting Documentation:

Income Verification (past 3 months):
☐ Pay stubs
☐ Self-employment income records
☐ Social Security benefit statements
☐ Pension/retirement income statements
☐ Rental income documentation
☐ Other income sources: [DESCRIBE]

Asset Verification:
☐ Bank statements (all accounts, past 3 months)
☐ Investment account statements
☐ Real property appraisals or assessments
☐ Vehicle valuations (NADA or Kelley Blue Book)
☐ Life insurance cash value statements
☐ Retirement account statements (401(k), IRA, etc.)

Expense Verification:
☐ Mortgage/rent payment documentation
☐ Utility bills
☐ Health insurance premium statements
☐ Medical expense documentation
☐ Court-ordered payment documentation
☐ Child care expense documentation

Additional Documentation:
☐ Copy of filed tax returns for past 6 years
☐ Proof of current estimated tax payments (if applicable)
☐ Proof of current federal tax deposits (if business)
☐ Documentation supporting special circumstances
☐ Medical records (if health-related hardship)
☐ Other: [DESCRIBE]

SECTION 6: TAXPAYER CERTIFICATIONS

The taxpayer(s) hereby certify that:

☐ All federal tax returns required to be filed have been filed or valid extensions are in place

☐ All required estimated tax payments for the current year have been made

☐ All required federal tax deposits have been made (if applicable to business)

☐ The taxpayer is not currently in an open bankruptcy proceeding

☐ All information provided in this application is true, correct, and complete

☐ The taxpayer understands that the IRS will retain all payments and fees even if the offer is rejected, returned, or withdrawn

☐ The taxpayer agrees to comply with all tax filing and payment requirements for 5 years from the date of offer acceptance

SECTION 7: DOUBT AS TO LIABILITY DOCUMENTATION (IF APPLICABLE)

If submitting based on Doubt as to Liability, the following additional information is provided:

☐ Form 656-L, Offer in Compromise (Doubt as to Liability)

☐ Detailed statement explaining why the liability is incorrect

☐ Supporting documentation and legal authorities

Disputed Tax Assessment Summary:

SECTION 8: SPECIAL CIRCUMSTANCES (IF APPLICABLE)

☐ Economic Hardship - Full payment would leave taxpayer unable to meet basic living expenses

☐ Health Issues - Taxpayer or family member has serious illness affecting ability to pay

☐ Age/Disability - Taxpayer's age or disability limits earning capacity

☐ Other Exceptional Circumstances:
[DESCRIBE ANY OTHER SPECIAL CIRCUMSTANCES THE IRS SHOULD CONSIDER]

Supporting Documentation Attached:
[LIST DOCUMENTS SUPPORTING SPECIAL CIRCUMSTANCES]

SECTION 9: REPRESENTATIVE INFORMATION (IF APPLICABLE)

Representative Name: [NAME]

Firm Name: [FIRM]

Address:
[ADDRESS]

Telephone: [PHONE]

Fax: [FAX]

Email: [EMAIL]

CAF Number: [CAF NUMBER]

☐ Form 2848, Power of Attorney and Declaration of Representative is attached
☐ Representative is authorized to receive all correspondence related to this offer
☐ Representative is authorized to sign Form 656 on behalf of taxpayer

SECTION 10: SUBMISSION CHECKLIST

Before Mailing, Verify:

☐ All required forms are completed and signed
☐ All supporting documentation is included
☐ Application fee and initial payment are enclosed
☐ Copies of all documents have been retained for taxpayer's records
☐ Package is being sent via certified mail with return receipt requested

Certified Mail Information:
Certified Mail Number: ______________________
Date Mailed: ______________________

IMPORTANT NOTICES

1. Processing Time: OIC processing typically takes 12-24 months.

2. Statute of Limitations: The collection statute is suspended during OIC consideration plus 30 days.

3. Levy Protection: The IRS generally will not levy while an OIC is pending.

4. Refunds: Tax refunds will be applied to the tax debt while the offer is being considered.

5. Compliance Requirement: Failure to comply with filing and payment requirements during and after OIC approval will result in default.

6. Automatic Acceptance: If the IRS does not make a determination within 24 months, the offer is deemed accepted.

7. Appeal Rights: If the offer is rejected, the taxpayer may appeal the decision to the IRS Independent Office of Appeals within 30 days.

CONTACT INFORMATION

For questions about the status of your offer:

IRS Centralized Offer in Compromise Unit
Telephone: 1-800-829-1040
Website: www.irs.gov/payments/offer-in-compromise

OIC Pre-Qualifier Tool: www.irs.gov/oic-prequalifier

Thank you for your consideration of this Offer in Compromise. Please contact the undersigned with any questions or requests for additional information.

Respectfully submitted,

Taxpayer Signature: ___________________________________

Printed Name: [TAXPAYER NAME]

Date: [DATE]

Spouse Signature (if joint): ___________________________________

Printed Name: [SPOUSE NAME]

Date: [DATE]

This template is provided for informational purposes and should be reviewed by qualified tax counsel before submission to the IRS.