Internal Revenue News Release IR-2003-124
, October 23, 2003.
[ Code
Sec. 7122]
Internal Revenue Service: Procedure and
administration: Offers in compromise:
Application fee. --
Beginning on November 1, 2003, the
IRS
will charge, with certain exceptions, a $150
application fee for the processing of offers in
compromise (OICs). Individuals whose monthly
income falls at or below levels based on the
Department of Health and Human Services
guidelines, and taxpayers that file OICs based
solely on doubt as to liability, will be exempt
from the fee. Individuals claiming the poverty
guideline exception must certify their
eligibility using Form 656-A, Offer in
Compromise Application Fee Instructions and
certification. To submit an OIC, taxpayers are
to use the May 2001 version of Form 656, Offer
in Compromise. The application fee for OICs that
do not qualify for an exception must be
submitted using a check or money order payable
to the
United States
Treasury.
Starting Nov. 1, 2003, the Internal Revenue
Service will begin charging, with some
exceptions, a $150 application fee to process
offers in compromise. An offer in compromise (OIC)
allows taxpayers to settle their tax liabilities
for less than the full amount.
The fee will help offset the cost of providing
this service, as well as reduce the number of
offers that are filed inappropriately, for
example, only to delay collection.
Taxpayers will be exempt from the fee if their
monthly income falls at or below levels based on
the Department of Health and Human Services
poverty guidelines or if they file offers based
solely on doubt as to liability. The poverty
guideline exception applies only to individuals.
Taxpayers who claim the poverty guideline
exception must certify their eligibility using
Form 656-A, "Offer in Compromise
Application Fee Instructions and
Certification."
To submit an OIC, taxpayers must use the May
2001 version of Form 656, "Offer in
Compromise." Those requesting an OIC must
have filed all required federal tax returns and
not be a debtor in a bankruptcy case. If in
business, they must also have filed and paid any
required employment tax returns on time for the
two quarters prior to filing the OIC and be
current with deposits for the quarter in which
the offer in compromise was submitted.
Those who file an OIC postmarked on or after
Nov. 1, 2003, and do not meet one of the
exceptions, must submit the application fee
using a check or money order made payable to the
United States Treasury. Cash payments will not
be accepted.
Go to
IRS
.gov for more information on the OIC application
fee, as well as Forms 656 and 656-A.
IRS
forms can also be ordered by calling the toll
free hotline at
1-800-829-3676
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