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Non Liable Spouse & Offer in Compromise – Paul Gaulkin CPA


In the event an Offer in Compromise based on doubt as to collectability is submitted by a married taxpayer whose spouse is not liable for the tax debt, the assets and income attributable to the non liable spouse will not be considered in determining reasonable collection potential. This means that the IRS will generally not pursue the assets and income of the non liable spouse when negotiating an Offer in Compromise that is based on doubt as to collectability. The … Read more

Doubt as to Collectability Offer in Compromise – Paul Gaulkin CPA

Big letter stamp IRS

If a taxpayer wishes to submit an offer in compromise on the basis of doubt as to collectability, they will need to show the IRS: 1. It is unlikely that the tax liability can be collected in full 2. The amount offered in satisfaction of the liability reflects the reasonable collection potential Without proving these two points to the IRS, it is likely that an offer will be denied on the basis of doubt as to collectability. Reasonable collection potential … Read more

Offer in Compromise Framework – Paul Gaulkin CPA

Sign saying expect results

The Internal Revenue Code provides statutory authority for the IRS to compromise or settle any tax liability for less than the full amount owed. This authority is discretionary on the part of the IRS, and there are no statutory rules that require acceptance of an offer in compromise under any circumstances. The IRS has to authority to reject any offer in compromise it chooses to and usually only will compromise a debt under certain circumstances. Chance of Acceptance It should … Read more

Collection after Offer in Compromise Submission – Paul Gaulkin CPA


Once an Offer in Compromise application has been submitted to the IRS, all collection actions against a taxpayer must stop. This matter generally has to be negotiated with the Revenue Officer; however, the only stated grounds for continuing collection are made for delays and under conditions of jeopardy of the liability. Collection after Offer in Compromise Submission The IRS is also prohibited from levying a taxpayer’s property or rights to property while an Offer in Compromise is pending, for 30 … Read more

Form 656 Instructions (Offer in Compromise) – Paul Gaulkin CPA


Once the amount of the offer has been determined, Form 656 (Offer in Compromise) should be completed. It is important to remember that the IRS will only process applications that have been filed out on the most current Form 656. It is extremely crucial that the form be filled out as carefully as possible. The IRS will not process any application for an Offer in Compromise that has errors within it. It is important for any taxpayer to read the … Read more

Changing an Accepted Offer in Compromise – Paul Gaulkin CPA


Sometimes, a taxpayer may wish to change or add additional years to their already accepted Offer in Compromise. This can arise from many different situations, one being a taxpayer’s inability to pay the balance on a subsequent filed tax return when something unforeseen happens. Submitting Changes In order to submit a change to an accepted Offer in Compromise, the taxpayer must send their request to the IRS in writing but another Form 656 is not required and the taxpayer does … Read more

Rejected Offer in Compromise – Paul Gaulkin CPA

Rejected Stamp

When the IRS rejects an Offer in Compromise proposal, they will generally send prompt notice to the applicant explaining the reasons why the Offer in Compromise has been rejected. All cash payments that were made to the IRS when the Offer in Compromise was submitted will not be refunded to the taxpayer. This is important for any taxpayer to remember, it can be very frustrating to have thousands of dollars not be refunded when your offer is rejected. Submitting New … Read more

Revising an Accepted Offer in Compromise Form 656 – Paul Gaukin CPA

clock showing change

Sometimes a taxpayer whose Offer in Compromise has already been accepted by the IRS needs to submit a revision to the original agreement. This can occur in a variety of situations, one that is common however, is a taxpayer inability to pay the balance on a tax return that is filed in years following the acceptance of the Offer in Compromise. If the taxpayer was unable to pay and therefore neglected to submit a revision, the IRS would classify the … Read more