If a taxpayer qualifies to make an offer in compromise oic the irs may accept less than the full amount a taxpayer owes. This compromise agreement this agreement or this compromise agreement effective as of date the effective date is made and entered into by and between employer name registration number number a company organized and existing in england with offices located at address hereinafter employer and employee name hereinafter.
In the first paragraph the irs will explain that they accepted your offer in compromise and the acceptance date is the date of the letter.
Offer in compromise letter sample. As far as a sample cover letter this would be difficult to provide as each person s circumstances are different and would require a different approach. Generally offers in compromise take one of two forms. Debt compromise letter respected sir madam my company name of the company for the past five years has maintained good ties with name of the bank in lieu of the company s inability to pay its debts due for the month of date i request you to consider my application and forgo my debt for the month.
Here are some of the common terms. For the irs to consider an offer in compromise from you you must convince the irs that it s doubtful they ll be able to collect what you owe them either now or in the future. The taxpayer pays 20 of the total offer amount with his application then if the irs accepts the offer the taxpayer pays the rest in five or fewer payments.
Agreement to compromise debt. Taxpayers have no legal right to have a tax bill reduced by the irs however the irs must give a properly submitted oic fair consideration. Recently the irs has accepted approximately 40 of submitted oic s.
Sample offer in compromise forms are available from a variety of sources such as tax professionals publications and websites. The terms of your irs offer in compromise acceptance letter. This form calls for taxpayer s personal details income sources assets and investments.
The irs will also inform you that acceptance is based upon the conditions of form 656 the offer in compromise. The taxpayer makes an initial payment and then makes monthly payments while the irs considers the offer. Sample letter for offer in compromise template keywords.
The basics of your cover letter need to convince the irs that it is in their best interest to enter into this offer agreement. The basic form required for applying for an offer in compromise is form 656. Sample letter for offer in compromise template author.
You ll also receive a written letter if the irs rejects your offer in compromise. An offer in compromise letter of rejection will include. Your right to an appeal.
You have 30 days from the letter s postmark to file an appeal using form 13711 plus documents explaining your reason for appeal. For value received the undersigned being a creditor of organization hereby enters into an agreement to compromise and reduce the indebtedness due the undersigned on the below mentioned terms and conditions.