The offer forms operationalize section 7122 and Treasury Regulation section 301.7122-1. The package should be reviewed as a legal and financial submission, not completed from a marketing estimate.
What the authority does
Current IRS forms require identification of liabilities, a compromise ground, payment terms, source of funds, and extensive financial information for collectibility-based offers. Filing compliance, estimated payments or deposits, application fees, and offer payments are governed by current instructions and exceptions.
Why it matters in a tax controversy
The financial statement should be tested before the offer amount is chosen. Asset equity, realizable value, household contributions, business income, future income, allowable expenses, transfers, dissipated assets, special circumstances, and the remaining collection period can change both eligibility and strategy.
What it does not answer by itself
An online pre-qualifier or formula is not a legal acceptance decision. A low offer can be worse than another resolution when it extends collection time, requires unaffordable payments, omits assets, or is likely to be returned without appeal rights.
Research and case checkpoints
- Choose the legal compromise ground before selecting forms and calculations.
- Read every current Form 656 term and certification.
- Reconcile the OIC financial statement to complete records.
- Compare rejection, return, withdrawal, acceptance, and default consequences.
Primary and official sources
Currency note: Check the current text, amendment history, effective date, and the version governing the tax period or agency action before relying on this summary.