1 A Free Guide Provided by TAXCO IRS TAX RELIEF GUIDE Table of Contents Chapter One: Working with the IRS Page 3 Chapter Two: IRS Problems and Solutions Page 6 Problem One: The IRS is Threatening a Bank Levy or Wage Garnishment Page 6 Problem Two: Stopping a Bank Levy or Wage Garnishment Page 9 Problem Three: The IRS is Not Responding to Me! Page 10 Problem Four: I Have Not Paid My Taxes in Years! Page 12 Problem Five: I Got Divorced and My Ex is Causing Me Tax Problems Page 13 Problem Six: I Can’t Pay My Tax Return Bill! Page 15 Chapter Three: Preparing an Offer in Compromise Page 17 Chapter Four: Frequently Asked Questions Page 24 Chapter Five: Important Tax Forms Page 28 Chapter One Working with the IRS You may or may not know this, but the IRS Revenue Officers are the most powerful people in America. They are the only ones that can seize your assets and garnish your wages without a court order. Even the president would have to go get a court order to do something like this. By the way, if a Revenue Officer comes to your door and you do not want to speak with them, tell them you have a representation and that the representative will call them tomorrow. Get the agent’s name and contact information. Contact a tax settlement representative immediately thereafter. There is no way to overestimate the importance of working out your problems with the IRS. If you don’t pay attention to their requests and respond quickly, actions against you and your family will escalate quickly! When you or a representative of yours lets the IRS know that you are working on ways to resolve your tax issues, they are actually very happy to hear from you. The IRS is happy because they know you will finally resolve your tax problems. If you work with a representative will not have to speak to the IRS. Directly. All correspondences should be mediated through your 2 representative, that is, if they are a legitimate, professional corporation. You will receive a copy of all correspondences, but you will not have to speak with the IRS directly. If you choose to work on your case with the IRS yourself, you will be responsible for maintaining consistent and timely correspondence with them. We highly suggest finding representation so you don’t have to do this, however, the point of this guide is to give you as much ammunition to deal with the IRS on your own if you can’t afford any representation. If you want representation you should look for either a CPA, an enrolled agent or an attorney that specializes in taxation. According to the National Association of Enrolled Agents, an Enrolled Agent is: “…a federallyauthorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.” 3 Make sure that you don’t talk to just any tax professional. If you want someone that can work on your behalf legally then you need an Enrolled Agent with the IRS. If you would like to speak to an Enrolled Agent free of charge before making any decisions about your tax related issues, then please call the TaxCO main line and ask for tax help. We can be reached Monday through Friday from 9:00 a.m. to 6:00 p.m. pst at 888.556.9285. Alternatively, reach us by going back to http://www.gotaxco.com and fill out the “Get a Free Consultation” section of the website. One of our customer service representatives will refer you to an Enrolled Agent for counseling completely free of charge. 4 Chapter Two Types of Tax Problems Problem One: The IRS is Threatening a Bank Levy or Wage Garnishment If you are being threatened by a bank levy or wage garnishment there are a number of things that you can do to solve your problems. File a Request for a Collection Due Process Hearing. In the request, explain that you need an installment agreement, uncollectible status or some other collection alternative. Collection of delinquent tax begins with a series of notices asking for payment. If payment is not made, the IRS eventually mails a final notice, notice of intent to levy, IRS Letter 1058. This notice provides thirty days to pay, after which time the IRS may begin enforcement action. It explains that you have the right to file a Request for Collection Due Process Hearing within that thirty‐day period. Use 12153 to submit the request. But you should never wait for the final notice to take action. Ask for an installment agreement as soon as you receive the first notice. However, if you are facing a final notice, the Request for Collection Due Process Hearing is the way to head off the attack. If the request is filed on time, the IRS cannot take 5 any collection action until after you've had your hearing. The hearing is held by the Appeals Office. The appeal also gives you the right to challenge any collection action on any appropriate ground, including challenging the underlying tax debt. Write a letter in response to the initial collection notice to the service center that issued it. Explain that you do not have the money to be able to pay in full and ask for an installment agreement. If you cannot afford to make a payment, ask for uncollectible status. Include Form 9465, Installment Agreement Request, with your letter. Your letter should also explain that a wage or bank levy will cause serious economic hardship by making it impossible to pay your living expenses. Include a short worksheet showing your net take‐home pay and monthly living expenses. Send the letter via certified mail and get it off immediately. If you do not hear a favorable word from the service center within a brief period of time, say two weeks, contact your local Taxpayer Advocate. Your goal is to get an installment agreement or uncollectible status established based upon your ability (or lack of ability) to pay. Once the installment 6 agreement or uncollectible status is in place, the IRS cannot pursue levy or seizure of assets, including wages and bank accounts. 7 Problem Two: Stopping a Bank Levy or Wage Garnishment Immediately contact the Taxpayer Advocate. Write a letter giving the name and address of the person levied, i.e., your bank or employer, and explain that the levy is causing serious economic hardship. Explain that you are not able to pay living expenses if the levy is not lifted. Include with your letter a copy of the wage or bank levy if you have one. Also provide a detailed analysis of your income and expenses so that the TA can see that the levy is causing a hardship. The best way to this is with IRS Form 433‐A. Ask the TA to immediately issue a release of levy and that it be faxed to your bank or employer. As soon as the bank or employer receives the release of levy, it must disregard the levy notice and resume paying your wages or allowing access to your bank account as usual. 8 Problem Three: The IRS is Not Responding to Me! If you never had a chance to present your case for installment agreement, uncollectible status or other proposed solution to the outstanding debt and your time to file a Collection Due Process appeal request has passed then this section is specifically for you. File a collection appeal. While a request for a Collection Due Process appeal must be filed within 30 days of receiving the final notice (Letter 1058) or thirty days of receiving the notice of lien filing (Letter 3172), a collection appeal request can be filed within one year of receiving either letter. Use Form 9423, Collection Appeal Request, to instigate a collection appeal. File it with the manager of the collection officer working your case or to the Chief of the Collection function in your local area if there is no individual assigned to your case. Your appeal case is then assigned to the Appeals Office for review. At the conference, you have the right to present evidence to show either that the underlying tax assessment is in error or the collection actions are improper or 9 otherwise not suited to the facts of the case. The Appeals Office has the duty to show that the IRS followed all necessary administrative rules in carrying out the collection action. You have the right to propose any applicable solution to the problem of the delinquent tax. 10 Problem Four: I Have Not Paid My Taxes in Years! Use the "non‐filer" program. At present, there are over twelve million Americans who have stopped filing tax returns, many of them because they did not have the money to pay one year, then failed to file. That one year turned into many as they fell into a pattern of non‐filing caused by the fear of being found out. They desperately want to get back into the system and stop looking over their shoulder but do not know how. Since 1992, the IRS operates the so‐called "non‐filer" program specifically pointed at this situation. It offers a carrot and stick approach to the problem. If you properly step forward and correct the non‐filing, the IRS agrees not to prosecute the potential legal violation. However, if it finds you before you find it, it makes no promises. To contact IRS representatives in the “non‐filer” department simply go to: http://www.irs.gov/irm/part4/irm_04‐019‐017r.html 11 Problem Five: I Got Divorced and My Ex is Causing Me Tax Problems If your ex‐spouse has caused you to have tax problems and the IRS is now coming after you then you can file an application for innocent spouse relief. Each year, countless men and women are left stranded with tax debts attributable to their ex‐husbands and ex‐wives. When the marriage breaks up, the IRS chases the easiest target. Too often, that happens to be the wife who is struggling to provide for the children while the husband runs from his responsibilities. The IRS Restructuring act of 1998 added provisions to the tax code that can extricate a person from this situation. They are referred to as the "innocent spouse" provisions and they apply in three separate circumstances. The first is where the tax debt is due to an error in the return, such as unreported income or bogus deductions, attributable to the husband which the wife did not know or had no reason to know about. When you can show that you did not enjoy the financial benefit of the unpaid tax, you can be relieved of the tax debt. 12 The second condition is when you are divorced or living apart for at least the past twelve months. Under this scenario, you have up to two years in which to make an election to be treated as a separate taxpayer. That is to say, you can switch your filing status from married filing jointly to married filing separately. That way, you are taxed only on your income, not your husband's. The election makes your husband solely liable for his own tax debt and you do not need his consent to change the filing status. The third condition is a kind of "catch‐all." It allows for innocent spouse relief when neither of the above two conditions apply, but where it is "inequitable" (that is to say, "unfair") to hold the wife liable for the debt. In this situation, general financial and life circumstances bear upon whether it is fair to hold the wife responsible for the unpaid taxes. If you want to file an innocent spouse claim, fill out IRS Form 8857: http://www.irs.gov/pub/irs‐pdf/f8857.pdf 13 Problem Six: I Can’t Pay My Tax Return Bill! Penalties and interest are added and you subject yourself to a pattern of non‐ filing and non‐payment if you don’t send in the taxes you owe with your return. To avoid this, obtain an extension of time to pay the tax. One of the largest problems citizens face is the inability to pay the tax on time. Each year, in excess of 13 million penalties for failure to pay taxes on time are assessed. Even worse, the addition of compound interest on the entire unpaid balance often transforms a difficult situation into an impossible one. The solution to the problem lies in a very simple procedure the IRS denies exists. It is the right to seek an extension of time to pay the tax. Do not confuse this with the extension of time to file which. Please recall that Form 4868, the filing extension, does not provide an extension of time to pay. To obtain a payment extension you must use IRS Form 1127, Application for Extension of Time for Payment of Tax. The IRS denies that Form 1127 exists. 14 The payment extension is not automatic. You must show that you do not have the money to pay the tax on time, that you exercised reasonable business care in providing for your tax debt but due to circumstances beyond your control, you are unable to pay on time. You must also show that coming up with the money will cause a financial hardship. This is not difficult to do when you have little or no cash available and no assets that can be readily liquidated to pay the tax. Form 1127 is quite simple and the instructions make it clear what must be done to comply with IRS' requirements. File Form 1127 in advance of the April 15 payment deadline. If the application is granted, you are afforded up to six additional months to pay the taxes, without penalties. 15 Chapter Three Preparing an Offer in Compromise An offer in compromise is a means of mitigating your tax penalties. Typically a tax professional will author an offer in compromise for their clients but consumers can do this as well. To learn more, read exactly what the IRS has to say about drafting an offer in compromise yourself: (From IRS.Gov) An offer in compromise (OIC) is an agreement between a taxpayer and the Internal Revenue Service that settles the taxpayer’s tax liabilities for less than the full amount owed. Absent special circumstances, an offer will not be accepted if the IRS believes that the liability can be paid in full as a lump sum or through a payment agreement. In most cases, the IRS will not accept an OIC unless the amount offered by the taxpayer is equal to or greater than the reasonable collection potential (RCP). The RCP is how the IRS measures the taxpayer’s ability to pay and includes the value that can be realized from the taxpayer’s assets, such as real 16 property, automobiles, bank accounts, and other property. The RCP also includes anticipated future income, less certain amounts allowed for basic living expenses. Taxpayers should beware of promoters’ claims that tax debts can be settled through the offer in compromise program for "pennies on the dollar." Three Types of OICs The IRS may accept an offer in compromise based on three grounds: 1. Doubt as to Collectibility ‐ Doubt exists that the taxpayer could ever pay the full amount of tax liability owed within the remainder of the statutory period for collection. Example: A taxpayer owes $20,000 for unpaid tax liabilities and agrees that the tax she owes is correct. The taxpayer’s monthly income does not meet her necessary living expenses. She does not own any real property and does not have the ability to fully pay the liability now or through monthly installment payments. 2. Doubt as to Liability ‐ A legitimate doubt exists that the assessed tax liability is correct. Possible reasons to submit a doubt as to liability offer include: (1) the examiner made a mistake interpreting the law, (2) the 17 examiner failed to consider the taxpayer’s evidence or (3) the taxpayer has new evidence. Example: The taxpayer was vice president of a corporation from 2004‐2005. In 2006, the corporation accrued unpaid payroll taxes and the taxpayer was assessed a trust fund recovery penalty as a responsible party of the corporation. The taxpayer was no longer a corporate officer and had resigned from the corporation on 12/31/2005. Since the taxpayer had resigned prior to the payroll taxes accruing and was not contacted prior to the assessment, there is legitimate doubt that the assessed tax liability is correct. 3. Effective Tax Administration ‐ There is no doubt that the tax is correct and there is potential to collect the full amount of the tax owed, but an exceptional circumstance exists that would allow the IRS to consider an OIC. To be eligible for compromise on this basis, a taxpayer must demonstrate that the collection of the tax would create an economic hardship or would be unfair and inequitable. Example: Mr. & Mrs. Taxpayer have assets sufficient to satisfy the tax liability and provide full time care and assistance to a dependent child, who has a serious long‐term illness. It is expected that Mr. and Mrs. Taxpayer will need to use the equity in assets to provide for adequate basic living expenses and 18 medical care for the child. There is no doubt that the tax is correct. OIC Payment Options In general, a taxpayer must submit a $150 application fee and initial payment along with the Form 656, Offer in Compromise. Taxpayers may choose to pay their offer in compromise in one of three payment options: 1. Lump Sum Cash Offer ‐ Payable in non‐refundable installments, the offer amount must be paid in five or fewer installments upon written notice of acceptance. A non‐refundable payment of 20 percent of the offer amount along with the $150 application fee is due upon filing the Form 656. If the offer will be paid in 5 or fewer installments in 5 months or less, the offer amount must include the realizable value of assets plus the amount that could be collected over 48 months of payments or the time remaining on the statute, whichever is less. If the offer will be paid in 5 or fewer installments in more than 5 months and within 24 months, the offer amount must include the realizable value of assets plus the amount that could be collected over 60 months of payments, or the time remaining on the statute, whichever is less. If the offer will be paid in 5 or fewer installments in more than 24 months, the 19 offer amount must include the realizable value of assets plus the amount that could be collected over the time remaining on the statute. 2. Short Term Periodic Payment Offer ‐ Payable in non‐refundable installments; the offer amount must be paid within 24 months of the date the IRS received the offer. The first payment and the $150 application fee are due upon filing the Form 656. Regular payments must be made during the offer investigation. The offer amount must include the realizable value of assets plus the total amount the IRS could collect over 60 months of payments or the remainder of the statutory period for collection, whichever is less. 3. Deferred Periodic Payment Offer ‐ Payable in non‐refundable installments; the offer amount must be paid over the remaining statutory period for collecting the tax. The first payment and the $150 application fee are due upon filing the Form 656. Regular payments must be made during the investigation. The offer amount must include the realizable value of assets plus the total amount the IRS could collect through monthly payments during the remaining life of the statutory period for collection. 20 The IRS is not bound by either the offer amount or the terms proposed by the taxpayer. The OIC investigator may negotiate a different offer amount and terms, when appropriate. The investigator may determine that the proposed offer amount is too low or the payment terms are too protracted to recommend acceptance. In this situation, the OIC investigator may advise the taxpayer as to what larger amount or different terms would likely be recommended for acceptance. Payments and Application Fees When filing an offer in compromise, two separate remittance documents should be sent, one for the application fee and the other for the required offer payment. All payments should be made by check or money order made payable to the United States Treasury. Practitioners who file multiple OICs at the same time should not combine application fees for multiple clients. The Form 656‐PPV, Offer in Compromise Payment Voucher, included in the Form 656, should be completed and attached to any periodic payment(s) that becomes due. Failure to submit any required periodic payments, after the initial payment has been submitted, will result in the offer being declared withdrawn. For offers originally sent to Holtsville, NY, send payments to: P.O. Box 9011, Holtsville, NY 11742. For offers originally sent to Memphis, TN, 21 send payments to: AMC Stop 880, P.O. Box 30834, Memphis, TN 38130‐0634. The OIC application fee reduces the assessed tax or other amounts due. The application fee will be returned if the OIC is deemed not to be processable. Unless the offer in compromise has been submitted under doubt as to liability or a completed Form 656‐A is included with the Form 656, the $150 application fee must be included with the offer or the IRS will return the offer. 22 Chapter Four Frequently Asked Questions Question 1: What is an Offer‐in‐Compromise? Answer: The Offer‐in‐Compromise is a program that the IRS put into practice some years ago to allow people with sizeable past due tax debts to settle that debt for a smaller portion of what is owed when it is unlikely that they could ever collect the full amount. The IRS does not widely promote this program because they would rather collect the entire tax liability. Accepting an OIC settlement is not a giveaway or amnesty – it is essentially a business decision on the part of the IRS whereby the taxpayer must demonstrate that it is in their best interest to settle rather than chase that person around for years. Question 2: How much could tax relief save me? Answer: The money you save will depend on the type of relief you qualify for and also upon the specifics of your situation. Under favorable circumstances, an Offer‐in‐Compromise could reduce your tax debt to literally pennies on the dollar. If you don’t qualify for an Offer however, you may still benefit from another program such as a Penalty Abatement, possibly eliminating thousands of dollars from your tax debt. To get an accurate assessment of your particular 23 situation, you should call Professional Tax Settlements today. Remember, we’ll only take your case if we’re sure we can help you. Question 3: Can I file a settlement myself? Answer: Yes. Anyone can file a settlement. However, the IRS scrutinizes each case, so if your proposal is incomplete or improperly worded you may wind up paying much more than you should. Worse yet, the IRS may reject your proposal altogether because the Offer is to low. Typically, the success rate of Offers written by a professional firm is far higher than those submitted by individuals, because they know the formulas and intricacies of IRS policy necessary for proper resolution. Most people find that working with a firm that specializes in settlements actually saves them not only a lot of time and work but also a significant amount of money. Our staff of professionals know the critical IRS secrets that will get your Offer accepted. Question 4: How do I know that I will get my settlement proposal accepted by the IRS? Answer: Only the IRS has the authority to grant a settlement to the taxpayer. However, long before ever sending anything to the IRS, we take you through a brief interview in order to determine what, if any, type of settlement you 24 qualify for. Because we adhere to the highest ethical standards, Professional Tax Settlements will never submit a settlement proposal for someone if we know they don't qualify. Simply put, if we can't help you, then we don't want you to hire us. Fortunately though, most taxpayers do qualify for some form of tax resolution. Question 5: How long will it take to resolve my case? Answer: Of course, the length of time it takes for resolution depends on the complexity of the case, but with most cases we aim to have the filing done within 30 days of being hired. It typically takes the IRS between 6 to 12 months to consider and then accept or reject a proposal, and we recommend that our clients take this time to put together the money for their settlement amount. It is our desire to resolve your case efficiently, while getting you the best settlement possible. Question 6: Will the IRS accept an Offer in Compromise if I haven't filed my taxes in many years? Answer: No. The first requirement of any Tax Settlement is that you are current in all your tax filings. If you do not already have all your returns filed, 25 Professional Tax Settlements also offers tax filing services for prior years returns to help bring you into compliance with the IRS. 26 Chapter Five Important Tax Forms Please see all of Our Most Useful Tax Forms on the Pages that Follow! Thank you for Downloading Our Guide! 27 Form 433-A (Rev. January 2008) Collection Information Statement for Wage Department of the Treasury Earners and Self-Employed Individuals Internal Revenue Service Wage Earners Complete Sections 1, 2, 3, and 4, including signature line on page 4. Answer all questions or write N/A. Self-Employed Individuals Complete Sections 1, 2, 3, 4, 5 and 6 and signature line on page 4. Answer all questions or write N/A. For Additional Information, refer to Publication 1854, “How To Prepare a Collection Information Statement” Include attachments if additional space is needed to respond completely to any question. Name on Internal Revenue Service (IRS) Account Social Security Number SSN on IRS Account Employer Identification Number EIN Section 1: Personal Information 1a Full Name of Taxpayer and Spouse (if applicable) 1c Home Phone 1d Cell Phone ( ) ( ) 1b Address (Street, City, State, ZIP code) (County of Residence) 1e Business Phone 1f Business Cell Phone ( ) ( ) 2b Name, Age, and Relationship of dependent(s) 2a Marital Status: Married Unmarried (Single, Divorced, Widowed) Social Security No. (SSN) Date of Birth (mmddyyyy) Driver’s License Number and State 3a Taxpayer 3b Spouse Section 2: Employment Information If the taxpayer or spouse is self-employed or has self-employment income, also complete Business Information in Sections 5 and 6. Taxpayer Spouse 4a Taxpayer’s Employer Name 5a Spouse’s Employer Name 4b Address (Street, City, State, ZIP code) 5b Address (Street, City, State, ZIP code) 4c Work Telephone Number 4d Does employer allow contact at work 5c Work Telephone Number 5d Does employer allow contact at work ( ) Yes No ( ) Yes No 4e How long with this employer 4f Occupation 5e How long with this employer 5f Occupation (years) (months) (years) (months) 4g Number of exemptions 4h Pay Period: 5g Number of exemptions 5h Pay Period: claimed on Form W-4 Weekly Bi-weekly claimed on Form W-4 Weekly Bi-weekly Monthly Other Monthly Other Section 3: Other Financial Information (Attach copies of applicable documentation.) 6 Is the individual or sole proprietorship party to a lawsuit (If yes, answer the following) Yes No Location of Filing Represented by Docket/Case No. Plaintiff Defendant Amount of Suit Possible Completion Date (mmddyyyy) Subject of Suit $ 7 Has the individual or sole proprietorship ever filed bankruptcy (If yes, answer the following) Yes No Date Filed (mmddyyyy) Date Dismissed or Discharged (mmddyyyy) Petition No. Location 8 Any increase/decrease in income anticipated (business or personal) (If yes, answer the following) Yes No Explain. (Use attachment if needed) How much will it increase/decrease When will it increase/decrease $ 9 Is the individual or sole proprietorship a beneficiary of a trust, estate, or life insurance policy (If yes, answer the following) Yes No Place where recorded: EIN: Name of the trust, estate, or policy Anticipated amount to be received When will the amount be received $ 10 In the past 10 years, has the individual resided outside of the United States for periods of 6 months or longer (If yes, answer the following) Yes No Dates lived abroad: from (mmddyyyy) To (mmddyyyy) www.irs.gov Cat. No. 20312N Form 433-A (Rev. 1-2008) Form 433-A (Rev. 1-2008) Page 2 Section 4: Personal Asset Information for All Individuals 11 Cash on Hand. Include cash that is not in a bank. Total Cash on Hand $ Personal Bank Accounts. Include all checking, online bank accounts, money market accounts, savings accounts, stored value cards (e.g., payroll cards, government benefit cards, etc.) List safe deposit boxes including location and contents. Type of Full Name & Address (Street, City, State, ZIP code) of Bank, Savings Account Number Account Balance As of ____________ Account & Loan, Credit Union, or Financial Institution. mmddyyyy 12a $ 12b $ 12c Total Cash (Add lines 12a, 12b, and amounts from any attachments) $ Investments. Include stocks, bonds, mutual funds, stock options, certificates of deposit, and retirement assets such as IRAs, Keogh, and 401(k) plans. Include all corporations, partnerships, limited liability companies or other business entities in which the individual is an officer, director, owner, member, or otherwise has a financial interest. Type of Loan Balance Equity Investment or Full Name & Address (Street, City, State, ZIP code) of Company Current Value (if applicable) Value Minus Loan Financial Interest As of ____________ mmddyyyy 13a Phone $ $ $ 13b Phone $ $ $ 13c Phone $ $ $ 13d Total Equity (Add lines 13a through 13c and amounts from any attachments) $ Amount Owed Available Credit Available Credit. List bank issued credit cards with available credit. As of ____________ As of ____________ Full Name & Address (Street, City, State, ZIP code) of Credit Institution Credit Limit mmddyyyy mmddyyyy 14a Acct No.: $ $ $ 14b Acct No.: $ $ $ 14c Total Available Credit (Add lines 14a, 14b and amounts from any attachments) $ 15a Life Insurance. Does the individual have life insurance with a cash value (Term Life insurance does not have a cash value.) Yes No If Yes complete blocks 15b through 15f for each policy: 15b Name and Address of Insurance Company(ies): 15c Policy Number(s) 15d Owner of Policy 15e Current Cash Value $ $ $ 15f Outstanding Loan Balance $ $ $ 15g Total Available Cash. (Subtract amounts on line 15f from line 15e and include amounts from any attachments) $ Form 433-A (Rev. 1-2008) Form 433-A (Rev. 1-2008) Page 3 16 In the past 10 years, have any assets been transferred by the individual for less than full value (If yes, answer the following. If no, skip to 17a) Yes No List Asset Value at Time of Transfer Date Transferred (mmddyyyy) To Whom or Where was it Transferred $ Real Property Owned, Rented, and Leased. Include all real property and land contracts. Current Fair Amount of Date of Final Purchase/Lease Date Current Loan Equity Market Value Monthly Payment (mmddyyyy) Balance FMV Minus Loan (FMV) Payment (mmddyyyy) 17a Property Description $ $ $ $ Location (Street, City, State, ZIP code) and County Lender/Lessor/Landlord Name, Address, (Street, City, State, ZIP code) and Phone 17b Property Description $ $ $ $ Location (Street, City, State, ZIP code) and County Lender/Lessor/Landlord Name, Address, (Street, City, State, ZIP code) and Phone 17c Total Equity (Add lines 17a, 17b and amounts from any attachments) $ Personal Vehicles Leased and Purchased. Include boats, RVs, motorcycles, trailers, etc. Description Current Fair Amount of Date of Final Purchase/Lease Date Market Value Current Loan Equity (Year, Mileage, Make, Model) Monthly Payment (mmddyyyy) (FMV) Balance FMV Minus Loan Payment (mmddyyyy) 18a Year Mileage $ $ $ $ Make Model Lender/Lessor Name, Address, (Street, City, State, ZIP code) and Phone 18b Year Mileage $ $ $ $ Make Model Lender/Lessor Name, Address, (Street, City, State, ZIP code) and Phone 18c Total Equity (Add lines 18a, 18b and amounts from any attachments) $ Personal Assets. Include all furniture, personal effects, artwork, jewelry, collections (coins, guns, etc.), antiques or other assets. Purchase/Lease Date Current Fair Amount of Date of Final Equity Current Loan Market Value Monthly Payment (mmddyyyy) Balance FMV Minus Loan (FMV) Payment (mmddyyyy) 19a Property Description $ $ $ $ Location (Street, City, State, ZIP code) and County Lender/Lessor Name, Address, (Street, City, State, ZIP code) and Phone 19b Property Description $ $ $ $ Location (Street, City, State, ZIP code) and County Lender/Lessor Name, Address, (Street, City, State, ZIP code) and Phone 19c Total Equity (Add lines 19a, 19b and amounts from any attachments) $ Form 433-A (Rev. 1-2008) Form 433-A (Rev. 1-2008) Page 4 If the taxpayer is self-employed, sections 5 and 6 must be completed before continuing. Monthly Income/Expense Statement (For additional information, refer to Publication 1854.) Total Income Total Living Expenses IRS USE ONLY 5 Source Gross Monthly Expense Items Actual Monthly Allowable Expenses 1 33 6 20 Wages (Taxpayer) $ Food, Clothing, and Misc. $ 21 Wages (Spouse) 1 7 $ 34 Housing and Utilities $ Interest - Dividends $ Vehicle Ownership Costs 8 22 35 $ 9 23 Net Business Income 2 $ 36 Vehicle Operating Costs $ 24 Net Rental Income 3 $ 37 Public Transportation 10 $ 25 4 $ 38 Distributions Health Insurance $ 26 Pension/Social Security (Taxpayer) 39 11 $ Out of Pocket Health Care Costs $ 27 Pension/Social Security (Spouse) $ 40 Court Ordered Payments $ 28 Child Support $ 41 Child/Dependent Care $ 29 Alimony $ 42 Life insurance $ 30 Other (Rent subsidy, Oil credit, etc.) $ 43 Taxes (Income and FICA) $ 31 Other $ 44 Other Secured Debts (Attach list) $ 32 Total Income (add lines 20-31) $ 45 Total Living Expenses (add lines 33-44) $ 1 Wages, salaries, pensions, and social security: Enter gross monthly wages and/or salaries. Do not deduct withholding or allotments taken out of pay, such as insurance payments, credit union deductions, car payments, etc. To calculate the gross monthly wages and/or salaries: If paid weekly - multiply weekly gross wages by 4.3. Example: $425.89 x 4.3 = $1,831.33 If paid biweekly (every 2 weeks) - multiply biweekly gross wages by 2.17. Example: $972.45 x 2.17 = $2,110.22 If paid semimonthly (twice each month) - multiply semimonthly gross wages by 2. Example: $856.23 x 2 = $1,712.46 2 Net Income from Business: Enter monthly net business income. This is the amount earned after ordinary and necessary monthly business expenses are paid. This figure is the amount from page 6, line 82. If the net business income is a loss, enter “0”. Do not enter a negative number. If this amount is more or less than previous years, attach an explanation. 3 Net Rental Income: Enter monthly net rental income. This is the amount earned after ordinary and necessary monthly rental expenses are paid. Do not include deductions for depreciation or depletion. If the net rental income is a loss, enter “0”. Do not enter a negative number. 4 Distributions: Enter the total distributions from partnerships and subchapter S corporations reported on Schedule K-1, and from limited liability companies reported on Form 1040, Schedule C, D or E. 5 Expenses not generally allowed: We generally do not allow tuition for private schools, public or private college expenses, charitable contributions, voluntary retirement contributions, payments on unsecured debts such as credit card bills, cable television and other similar expenses. However, we may allow these expenses if it is proven that they are necessary for the health and welfare of the individual or family or for the production of income. 6 Food, Clothing, and Misc.: Total of clothing, food, housekeeping supplies, and personal care products for one month. 7 Housing and Utilities: For principal residence: Total of rent or mortgage payment. Add the average monthly expenses for the following: property taxes, home owner’s or renter’s insurance, maintenance, dues, fees, and utilities. Utilities include gas, electricity, water, fuel, oil, other fuels, trash collection, telephone, and cell phone. 8 Vehicle Ownership Costs: Total of monthly lease or purchase/loan payments. 9 Vehicle Operating Costs: Total of maintenance, repairs, insurance, fuel, registrations, licenses, inspections, parking, and tolls for one month. 10 Public Transportation: Total of monthly fares for mass transit (e.g., bus, train, ferry, taxi, etc.) 11 Out of Pocket Health Care Costs: Monthly total of medical services, prescription drugs and medical supplies (e.g., eyeglasses, hearing aids, etc.) Certification: Under penalties of perjury, I declare that to the best of my knowledge and belief this statement of assets, liabilities, and other information is true, correct, and complete. Taxpayer’s Signature Spouse’s Signature Date Attachments Required for Wage Earners and Self-Employed Individuals: Copies of the following items for the last 3 months from the date this form is submitted (check all attached items): Income - Earnings statements, pay stubs, etc. from each employer, pension/social security/other income, self employment income (commissions, invoices, sales records, etc.). Banks, Investments, and Life Insurance - Statements for all money market, brokerage, checking and savings accounts, certificates of deposit, IRA, stocks/bonds, and life insurance policies with a cash value. Assets - Statements from lenders on loans, monthly payments, payoffs, and balances for all personal and business assets. Include copies of UCC financing statements and accountant’s depreciation schedules. Expenses - Bills or statements for monthly recurring expenses of utilities, rent, insurance, property taxes, phone and cell phone, insurance premiums, court orders requiring payments (child support, alimony, etc.), other out of pocket expenses. Other - credit card statements, profit and loss statements, all loan payoffs, etc. A copy of last year’s Form 1040 with all attachments. Include all Schedules K-1 from Form 1120S or Form 1065, as applicable. Form 433-A (Rev. 1-2008) Form 433-A (Rev. 1-2008) Page 5 Sections 5 and 6 must be completed only if the taxpayer is SELF-EMPLOYED. Section 5: Business Information 46 Is the business a sole proprietorship (filing Schedule C) Yes, Continue with Sections 5 and 6. No, Complete Form 433-B. All other business entities, including limited liability companies, partnerships or corporations, must complete Form 433-B. 47 Business Name 48 Employer Identification Number 49 Type of Business Federal Contractor Yes No 50 Business Website 51 Total Number of Employees 52a Average Gross Monthly Payroll 52b Frequency of Tax Deposits 53 Does the business engage in e-Commerce (Internet sales) Yes No Payment Processor (e.g., PayPal, Authorize.net, Google Checkout, etc.) Name & Address (Street, City, State, ZIP code) Payment Processor Account Number 54a 54b Credit Cards Accepted by the Business. Credit Card Merchant Account Number Merchant Account Provider, Name & Address (Street, City, State, ZIP code) 55a 55b 55c 56 Business Cash on Hand. Include cash that is not in a bank. Total Cash on Hand $ Business Bank Accounts. Include checking accounts, online bank accounts, money market accounts, savings accounts, and stored value cards (e.g. payroll cards, government benefit cards, etc.) Report Personal Accounts in Section 4. Account Balance Type of Full name & Address (Street, City, State, ZIP code) of Bank, Account Number As of ____________ Account Savings & Loan, Credit Union or Financial Institution. mmddyyyy 57a $ 57b $ 57c Total Cash in Banks (Add lines 57a, 57b and amounts from any attachments) $ Accounts/Notes Receivable. Include e-payment accounts receivable and factoring companies, and any bartering or online auction accounts. (List all contracts separately, including contracts awarded, but not started.) Include Federal Government Contracts. Status (e.g., age, Date Due Invoice Number or Accounts/Notes Receivable & Address (Street, City, State, ZIP code) Amount Due factored, other) (mmddyyyy) Federal Government Contract Number 58a $ 58b $ 58c $ 58d $ 58e Total Outstanding Balance (Add lines 58a through 58d and amounts from any attachments) $ Form 433-A (Rev. 1-2008) Form 433-A (Rev. 1-2008) Page 6 Business Assets. Include all tools, books, machinery, equipment, inventory or other assets used in trade or business. Include Uniform Commercial Code (UCC) filings. Include Vehicles and Real Property owned/leased/rented by the business, if not shown in Section 4. Current Fair Amount of Date of Final Purchase/Lease/Rental Market Value Current Loan Payment Equity Monthly Date (mmddyyyy) (FMV) Balance (mmddyyyy) FMV Minus Loan Payment 59a Property Description $ $ $ $ Location (Street, City, State, ZIP code) and County Lender/Lessor/Landlord Name, Address (Street, City, State, ZIP code) and Phone 59b Property Description $ $ $ $ Location (Street, City, State, ZIP code) and County Lender/Lessor/Landlord Name, Address (Street, City, State, ZIP code) and Phone 59c Total Equity (Add lines 59a, 59b and amounts from any attachments) $ Section 6 should be completed only if the taxpayer is SELF-EMPLOYED Section 6: Sole Proprietorship Information (lines 60 through 81 should reconcile with business Profit and Loss Statement) Accounting Method Used: Cash Accrual Income and Expenses during the period (mmddyyyy) to (mmddyyyy) . Total Monthly Business Income Total Monthly Business Expenses (Use attachments as needed.) Source Gross Monthly Expense Items Actual Monthly Materials Purchased 1 60 Gross Receipts $ 70 $ 2 61 Gross Rental Income $ 71 Inventory Purchased $ 62 Interest $ 72 Gross Wages & Salaries $ 63 Dividends $ 73 Rent $ 64 $ 74 3 Cash Supplies $ Other Income (Specify below) 75 4 Utilities/Telephone $ 65 $ 76 Vehicle Gasoline/Oil $ 66 $ 77 Repairs & Maintenance $ 67 $ 78 Insurance $ 68 $ Current Taxes 5 79 $ 80 Other Expenses, including installment payments (Specify) $ 69 Total Income (Add lines 60 through 68) $ 81 Total Expenses (Add lines 70 through 80) $ 82 Net Business Income (Line 69 minus 81) 6 $ Enter the amount from line 82 on line 23, section 4. If line 82 is a loss, enter “0” on line 23, section 4. Self-employed taxpayers must return to page 4 to sign the certification and include all applicable attachments. 1 Materials Purchased: Materials are items directly related to the 5 Current Taxes: Real estate, excise, franchise, occupational, production of a product or service. personal property, sales and employer’s portion of employment taxes. 2 6 Net Business Income: Net profit from Form 1040, Schedule C may Inventory Purchased: Goods bought for resale. 3 Supplies: Supplies are items used in the business that are consumed be used if duplicated deductions are eliminated (e.g., expenses for or used up within one year. This could be the cost of books, office business use of home already included in housing and utility expenses supplies, professional equipment, etc. on page 4). Deductions for depreciation and depletion on Schedule C are not cash expenses and must be added back to the net income 4 Utilities/Telephone: Utilities include gas, electricity, water, oil, other figure. In addition, interest cannot be deducted if it is already included fuels, trash collection, telephone and cell phone. in any other installment payments allowed. FINANCIAL ANALYSIS OF COLLECTION POTENTIAL FOR INDIVIDUAL WAGE EARNERS AND SELF-EMPLOYED INDIVIDUALS (IRS USE ONLY) Cash Available (Lines 11, 12c, 13d, 14c, 15g, 56, 57c and 58e) Total Cash $ Distrainable Asset Summary (Lines 17c, 18c, 19c, and 59c) Total Equity $ Monthly Total Positive Income minus Expenses (Line 32 minus Line 45) Monthly Available Cash $ Privacy Act: The information requested on this Form is covered under Privacy Acts and Paperwork Reduction Notices which have already been provided to the taxpayer. Form 433-A (Rev. 1-2008) Department of the Treasury — Internal Revenue Service Form 656 (March 2009) Offer in Compromise Attach Application Fee and Payment (check or money order) here. IRS RECEIVED DATE Section I Taxpayer Contact Information Taxpayer’s First Name and Middle Initial Last Name If a joint offer, spouse’s First Name and Middle Initial Last Name Business Name Taxpayer’s Address (Home and Business) (number, street, and room or suite no., city, state, ZIP code) Mailing Address (if different from above) (number, street, and room or suite no., city, state, ZIP code) DATE RETURNED Social Security Number (SSN) Employer Identification Number (EIN) (Primary) (Secondary) (EIN included in offer) (EIN not included in offer) - - - - - - Section II To: Commissioner of Internal Revenue Service I/We (includes all types of taxpayers) submit this offer to compromise the tax liabilities plus any interest, penalties, additions to tax, and additional amounts required by law (tax liability) for the tax type and period marked below: (Please mark an “X” in the box for the correct description and fill-in the correct tax period(s), adding additional periods if needed). 1040/1120 Income Tax - Year(s) 941 Employer's Quarterly Federal Tax Return - Quarterly period(s) 940 Employer’s Annual Federal Unemployment (FUTA) Tax Return — Year(s) Trust Fund Recovery Penalty as a responsible person of (enter corporation name) , for failure to pay withholding and Federal Insurance Contributions Act taxes (Social Security taxes), for period(s) ending Other Federal Tax(es) [specify type(s) and period(s)] Note: If you need more space, use a separate sheet of paper and title it “Attachment to Form 656 Dated .” Sign and date the attachment following the listing of the tax periods. Section III Reason for Offer in Compromise I/We submit this offer for the reason(s) checked below: Doubt as to Collectibility — “I have insufficient assets and income to pay the full amount.” You must include a complete Collection Information Statement, Form 433-A and/or Form 433-B. Effective Tax Administration — “I owe this amount and have sufficient assets to pay the full amount, but due to my exceptional circumstances, requiring full payment would cause an economic hardship or would be unfair and inequitable.” You must include a complete Collection Information Statement, Form 433-A and/or Form 433-B and complete Section VI. Section IV Offer in Compromise Terms I/We offer to pay $ (must be more than zero). Complete Section VII to explain where you will obtain the funds to make this offer. Check only one of the following: Lump sum cash offer – 20% of the amount of the offer $ must be sent with Form 656. Upon written acceptance of the offer, the balance must be paid in 5 or fewer installments. $ payable within months after acceptance $ payable within months after acceptance $ payable within months after acceptance $ payable within months after acceptance $ payable within months after acceptance Short Term Periodic Payment Offer - Offer amount is paid within 24 months from the date IRS received your offer. The first payment must be submitted with your Form 656. You must make regular payments during your offer investigation. Complete the following: $ will be submitted with the Form 656. Beginning in the month after the offer is submitted (insert month ), on the day of each month, $ will be sent in for a total of months. (Cannot extend more than 24 months from the date the offer was submitted.) Catalog Number 16728N www.irs.gov Form 656 (Rev. 3-2009) Page 2 of 4 Section IV Cont. Deferred Periodic Payment Offer – Offer amount will be paid over the remaining life of the collection statute. The first payment must be submitted with your Form 656. You must make regular payments during your offer investigation. Complete the following: $ will be submitted with the Form 656. Beginning in the month after the offer is submitted (insert month ), on the day of each month, $ will be sent in for a total of months. Optional - Designation of Required Payment under IRC 7122(c) You have the option to designate the required payment you made under Section IV above. If you choose not to designate your required payment, then the IRS will apply your payment in the best interest of the government. If the required payment is not paid, the offer will be returned even if you make a payment you designated as a deposit. Please complete the following if you choose to designate your payment: $ paid under IRC 7122 (c) is to be applied to my Tax Year/Quarter(s) (whichever is applicable) for my/our tax form . If you pay more than the required payment when you submit your offer and want any part of that additional payment treated as a deposit, check the box below and insert the amount. It is not required that you designate any portion of your payment as a deposit. I am making a deposit of $ with this offer. Section V By submitting this offer, I/we have read, understand and agree to the following conditions: (a) I/We voluntarily submit all tax payments made on this offer, (f) The IRS will keep all payments and credits made, received including the mandatory payments of tax required under or applied to the total original liability before submission of this section 7122(c). These tax payments are not refundable even offer and all payments required under section 7122(c). The if I/we withdraw the offer prior to acceptance or the IRS IRS will also keep all payments in excess of those required by returns or rejects the offer. If the offer is accepted, the IRS will section 7122(c) that are received in connection with the offer apply payments made after acceptance in the best interest of and that are not designated as deposits in Section IV. The the government. IRS may keep any proceeds from a levy served prior to submission of the offer, but not received at the time the offer (b) Any payments made in connection with this offer will be is submitted. As additional consideration beyond the amount applied to the tax liability unless I have specified that they be of my/our offer, the IRS will keep any refund, including treated as a deposit. Only amounts that exceed the interest, due to me/us because of overpayment of any tax or mandatory payments can be treated as a deposit. Such a other liability, for tax periods extending through the calendar deposit will be refundable if the offer is rejected or returned year in which the IRS accepts the offer. The date of by the IRS or is withdrawn. I/we understand that the IRS will acceptance is the date on the written notice of acceptance not pay interest on any deposit. issued by the IRS to me/us or to my/our representative. I/We may not designate an overpayment ordinarily subject to (c) The application fee for this offer will be kept by the refund, to which the IRS is entitled, to be applied to estimated IRS unless the offer was not accepted for processing. tax payments for the following year. (d) I/We will comply with all provisions of the Internal Revenue (g) I/We will return to the IRS any refund identified in Code relating to filing my/our returns and paying my/our paragraph (f) received after submission of this offer. required taxes for 5 years or until the offered amount is paid in full, whichever is longer. In the case of a jointly submitted (h) The IRS cannot collect more than the full amount of Offer in Compromise of joint liabilities, I/we understand that the liability under this offer. default with respect to the compliance provisions described in this paragraph by one party to this agreement will not result in (i) I/We understand that I/we remain responsible for the full the default of the entire agreement. The default provisions amount of the liabilities, unless and until the IRS accepts the described in Section V(i) of this agreement will be applied only offer in writing and I/we have met all the terms and conditions to the party failing to comply with the requirements of this of the offer. The IRS will not remove the original amount of paragraph. the liabilities from its records until I/we have met all the terms and conditions of the offer. I/we understand that the liabilities (e) I/We waive and agree to the suspension of any statutory I/we offer to compromise are and will remain liabilities until periods of limitation (time limits provided by law) for the IRS I/we meet all the terms and conditions of this offer. If I/we file assessment of the liability for the periods identified in Section for bankruptcy before the terms and conditions of this offer II. I/We understand that I/we have the right not to waive are completed, any claim the IRS files in the bankruptcy these statutory periods or to limit the waiver to a certain length proceedings will be a tax claim. or to certain periods. I/we understand, however, that the IRS may not consider this offer if I/we refuse to waive the statutory (j) Once the IRS accepts the offer in writing, I/we have periods for assessment or if we provide only a limited waiver. no right to contest, in court or otherwise, the amount of The amount of any Federal tax due for the periods described the liability. in Section II may be assessed at any time prior to the acceptance of this offer or within one year of the rejection of (k) The offer is pending starting with the date an authorized this offer. I/We understand that the statute of limitations for IRS official signs the form. The offer remains pending until an collection will be suspended during the period an offer is authorized IRS official accepts, rejects, returns or considered pending by the IRS (paragraph (k) of this section acknowledges withdrawal of the offer in writing. If I/we appeal defines pending). an IRS rejection decision on the offer, the IRS will continue to treat the offer as pending until the Appeals Office accepts or rejects the offer in writing. Catalog Number 16728N www.irs.gov Form 656 (Rev. 3-2009) Page 3 of 4 If I/we don’t file a protest within 30 days of the date the IRS (m) The IRS generally files a Notice of Federal Tax Lien to notifies me/us of the right to protest the decision, I/we waive the protect the Government’s interest on offers with deferred right to a hearing before the Appeals Office about the Offer in payments. Also, the IRS may file a Notice of Federal Tax Lien Compromise. during the offer investigation. This tax lien will be released when the payment terms of the offer agreement have been (l) If I/we fail to meet any of the terms and conditions of the satisfied. offer and the offer defaults, the IRS may: (n) I/We understand that IRS employees may contact third • immediately file suit to collect the entire unpaid balance of parties in order to respond to this request and I/we authorize the offer; the IRS to make such contacts. Further, by authorizing the IRS to contact third parties, I/we understand that I/we will not • immediately file suit to collect an amount equal to the receive notice, pursuant to section 7602(c) of the Internal original amount of the liability, minus any payment already Revenue Code, of third parties contacted in connection with received under the terms of this offer; this request. • disregard the amount of the offer and apply all amounts (o) I/We are offering to compromise all the liabilities assessed already paid under the offer against the original amount of against me/us as of the date of this offer and under the the liability; and/or taxpayer identification numbers listed in Section II above. I/We authorize the IRS to amend Section II, above, to include any • file suit or levy to collect the original amount of the liability, assessed liabilities we failed to list on Form 656. without further notice of any kind. The IRS will continue to add interest, as section 6601 of the Internal Revenue Code requires, on the amount the IRS determines is due after default. The IRS will add interest from the date the offer is defaulted until I/we completely satisfy the amount owed. Section VI Explanation of Circumstances I am requesting an Offer in Compromise for the reason(s) listed below: Note: If you believe you have special circumstances affecting your ability to fully pay the amount due, explain your situation. You may attach additional sheets if necessary. Please include your name and SSN or EIN on all additional sheets or supporting documentation. Section VII Source of Funds I / We shall obtain the funds to make this offer from the following source(s): Catalog Number 16728N www.irs.gov Form 656 (Rev. 3-2009) Page 4 of 4 Section VIll Mandatory Signatures If I / we submit this offer on a substitute form, I/ we affirm that this form is a verbatim duplicate of the official Form 656, and I/we agree to be bound by all the terms and conditions set forth in the official Form 656. Under penalties of perjury, I declare that I have examined this offer, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct and complete. Taxpayer Signature of Taxpayer Daytime Telephone Number Date (mmddyyyy) Attestation ( ) Signature of Taxpayer Date (mmddyyyy) Official Use Only I accept the waiver of the statutory period of limitations on assessment for the Internal Revenue Service, as described in Section V(e). Signature of Authorized Internal Revenue Service Official Title Date (mmddyyyy) Section IX Application Prepared by Someone Other than the Taxpayer If this application was prepared by someone other than the taxpayer, please fill in that person’s name and address below. Name Address (if known) (Street, City, State, ZIP code) Section X Paid Preparer Use Only Name of Preparer Signature of Preparer Date (mmddyyyy) Check if Preparer’s CAF no. or PTIN self-employed Firm’s name (or yours if self-employed), address, and ZIP code Section XI Third Party Designee Do you want to allow another person to discuss this offer with the IRS? Yes. Complete the information below. No Designee’s Name Telephone Number ( ) Privacy Act Statement We ask for the information on this form to carry out the internal revenue laws of the United States. Our authority to request this information is Section 7801 of the Internal Revenue Code. Our purpose for requesting the information is to determine if it is in the best interests of the IRS to accept an Offer in Compromise. You are not required to make an Offer in Compromise; however, if you choose to do so, you must provide all of the taxpayer information requested. Failure to provide all of the information may prevent us from processing your request. If you are a paid preparer and you prepared the Form 656 for the taxpayer submitting an offer, we request that you complete and sign Section X on Form 656, and provide identifying information. Providing this information is voluntary. This information will be used to administer and enforce the internal revenue laws of the United States and may be used to regulate practice before the Internal Revenue Service for those persons subject to Treasury Department Circular No. 230, Regulations Governing the Practice of Attorneys, Certified Public Accountants, Enrolled Agents, Enrolled Actuaries, and Appraisers before the Internal Revenue Service. Information on this form may be disclosed to the Department of Justice for civil and criminal litigation. We may also disclose this information to cities, states and the District of Columbia for use in administering their tax laws and to combat terrorism. Providing false or fraudulent information on this form may subject you to criminal prosecution and penalties. Attention: Instructions and pertaining forms for completing an accurate Offer in Compromise are available in the Form 656-B, Offer in Compromise Booklet. The Form 656-B is available through the IRS website www.irs.gov. Catalog Number 16728N www.irs.gov Form 656 (Rev. 3-2009) Form 1127 (Rev. February 2010) Application for Extension of Time for Payment of Tax Due to Undue Hardship OMB No. 1545-2131 Department of the Treasury Internal Revenue Service Before you begin: Use the chart on page 3 to see if you should file this form. Name(s) shown on return Identifying number Number, street, and apt., room, or suite no. If you have a P.O. box, see instructions. City, town, or post office, state, and ZIP code. If you have a foreign address, see instructions. Part I Request for Extension I request an extension from , 20 , to , 20 to pay tax of $ . This request is for (check only one box): The tax shown or required to be shown on Form . An amount determined as a deficiency on Form . This request is for calendar year 20 , or fiscal year ending , 20 . Part II Reason for Extension Undue hardship. Enter below a detailed explanation of the undue hardship that will result if your application is denied. (If more space is required, please attach a separate sheet.) To establish undue hardship, you must show that you would sustain a substantial financial loss if forced to pay a tax or deficiency on the due date. For a complete definition of “undue hardship,” see the instructions on page 3 under Who Should File. Part II Supporting Documentation III To support my application, I certify that I have attached (you must check both boxes or your application will not be accepted): A statement of my assets and liabilities at the end of last month (showing book and market values of assets and whether securities are listed or unlisted), and An itemized list of my income and expenses for each of the 3 months prior to the due date of the tax. Signature and Verification Under penalties of perjury, I declare that I have examined this application, including any accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete; and, if prepared by someone other than the taxpayer, that I am authorized to prepare this form. Signature of taxpayer Date Signature of spouse Date Signature of preparer other than taxpayer Date FOR IRS USE ONLY (Do not detach) This application is Approved Denied Returned: Reason(s): Signature of authorized official Date For Privacy Act and Paperwork Reduction Act Notice, see instructions. Cat. No. 17238O Form 1127 (Rev. 02-2010) [ This page left blank intentionally ] Form 1127 (Rev. 02-2010) Page 3 Section references are to the Internal Revenue Code. ● Taxes on structured settlement factoring transactions. ● Gift taxes. General Instructions Form 1127 can also be filed if you receive a notice and demand for payment (or tax bill) for any of the taxes shown below and Purpose of Form paying them at the time they are due will cause an undue Use Form 1127 to request an extension of time under section hardship. 6161 for payment of the following amounts. ● Normal taxes and surtaxes. ● The tax shown or required to be shown on a return. ● Taxes on private foundations and certain other tax-exempt ● An amount determined as a deficiency (an amount you owe organizations. after an examination of your return). ● Taxes on qualified investments. Determination Chart ● Gift taxes. Undue hardship. The term “undue hardship” means more than Use this chart to determine if Form 1127 is the correct form for an inconvenience. You must show you will have a substantial you to file. financial loss (such as selling property at a sacrifice price) if you IF you . . . THEN . . . pay your tax on the date it is due. Note. If you need an extension to pay estate tax, file Form 4768. Are seeking an extension of File Form 4868, Application for time to file your income tax Automatic Extension of Time To return File U.S. Individual Income Tax When To File Return, or Form 2350, Form 1127, and its supporting documentation, should be filed as Application for Extension of Time soon as you are aware of a tax liability or a tax deficiency you To File U.S. Income Tax Return. cannot pay without causing undue hardship. Do not file Form 1127. If you are requesting an extension of time to pay the tax due on Are seeking an extension of File Form 4768, Application for an upcoming return, Form 1127 must be received on or before the time to pay estate tax Extension of Time To File a due date of that return, not including extensions. Return and/or Pay U.S. Estate If you are requesting an extension of time to pay an amount (and Generation-Skipping determined as a deficiency, Form 1127 must be received on or Transfer) Taxes. Do not file before the due date for payment indicated in the tax bill. Form 1127. Are requesting a monthly See Form 9465, Installment Where To File installment payment plan Agreement Request. Do not file Form 1127. File Form 1127 with the Internal Revenue Service (Attn: Advisory Group Manager), for the area where you maintain your legal Are requesting to postpone File Form 1127 by the due date residence or principal place of business. See Pub. 4235, payment of the full amount of of your return or by the due date Collection Advisory Group Addresses, to find the address for your tax shown on your return or for the amount determined as a local advisory group. any amount determined as a deficiency. However, if the tax due is a gift tax reportable on Form 709, deficiency send Form 1127 to: Department of the Treasury Owe any tax and are not Call, write, or visit your local IRS Internal Revenue Service Center requesting, or do not qualify office to discuss your situation. Cincinnati, OH 45999 for, either a monthly For more information, see Pub. installment payment plan or an 594, The IRS Collection Process. extension of time to pay the Do not file Form 1127. Extension Period full amount An extension of more than 6 months generally will not be granted to pay the tax shown on a return. However, except for taxes due under sections 4981, 4982, and 5881, an extension for more than 6 months may be granted if you are out of the country. Who Should File You can file Form 1127 if you will owe any of the following, and An extension to pay an amount determined as a deficiency is paying the tax at the time it is due will cause an undue hardship. generally limited to 18 months from the date payment is due. However, in exceptional circumstances, an additional 12 months ● Income taxes. may be granted. ● Self-employment income taxes. Note. An extension to pay a deficiency will not be granted if the ● Withheld taxes on nonresident aliens and foreign corporations. deficiency is due to negligence, intentional disregard of rules and regulations, or fraud with intent to evade tax. ● Taxes on private foundations and certain other tax-exempt organizations. Payment Due Date ● Taxes on qualified investment entities. You must pay the tax before the extension runs out. Do not wait ● Taxes on greenmail. to receive a bill from the IRS. Form 1127 (Rev. 02-2010) Page 4 Interest. You will owe interest on any tax not paid by the due date Signature and Verification of the return, or the due date of any amount determined to be a deficiency, regardless of whether an extension of time to pay the This form must be signed and dated. tax has been obtained. The interest runs until you pay the tax. Individuals. If this application is for the tax shown on a joint return Penalties. Penalties may be imposed if you fail to pay the tax or a joint tax liability for an amount determined as a deficiency, within the extension period granted. both you and your spouse must sign and date this form. If your spouse cannot sign, see Pub. 501, Exemptions, Standard Specific Instructions Deduction, and Filing Information. Name, Address, and Identification Number Privacy Act and Paperwork Reduction Act Notice. We ask for Individuals. Enter your name, address, and social security the information on this form to carry out the Internal Revenue laws number (SSN) or individual taxpayer identification number (ITIN). If of the United States. We need this information to ensure this application is for the tax shown on a joint return or a joint tax compliance with these laws and to properly grant extensions of liability for an amount determined as a deficiency, include both time to pay tax. Applying for an extension of time for the payment spouses’ names in the order in which they appear or will appear of tax is voluntary. However, providing the requested information on your return, and enter the SSN or ITIN of the spouse whose is mandatory if you apply for the extension. Our legal right to ask name appears first. for the information requested on this form is based in sections Corporations. Enter your company’s name, address, and 6001, 6011, 6109, and 6161 and their regulations. If you fail to employer identification number. provide all or part of the information requested, your application may be denied. If you provide false or fraudulent information, you P.O. box. Enter your box number only if your post office does not may be subject to penalties. deliver to your street address. You are not required to provide the information requested on a Foreign address. Enter the information in the following order: form that is subject to the Paperwork Reduction Act unless the city, province or state, and country. Follow the country’s practice form displays a valid OMB control number. Books or records for entering the postal code. Do not abbreviate the country name. relating to a form or its instructions must be retained as long as their contents may become material in the administration of any Part I Internal Revenue law. Generally, tax returns and return information Request for extension. Enter the due date of your return (not are confidential, as required by section 6103. However, section including extensions) or the due date for paying the amount 6103 allows or requires the Internal Revenue Service to disclose determined as a deficiency. Enter the date you propose to pay the the information to others as described in the Code. For example, tax and the amount of tax you owe. The date you propose to pay we may disclose this information to the Department of Justice for the tax can be up to: enforcement of civil or criminal tax laws; to cities, states, the District of Columbia, and U.S. commonwealths or possessions to ● 6 months from the due date of your return (not including administer their tax laws; to other countries under a tax treaty; to extensions), if your request is for payment of the tax shown on federal and state agencies to enforce non-tax criminal laws; or to your return (the date you propose can be more than 6 months if federal law enforcement and intelligence agencies to combat you are out of the country), or terrorism. ● 18 months from the date payment is due, if your request is for The time needed to complete and file this form will vary payment of an amount determined as a deficiency (an additional depending on individual circumstances. The estimated burden for 12 months can be requested for a deficiency in exceptional individual taxpayers filing this form is approved under OMB circumstances). control number 1545-0074 and is included in the estimates shown Check the applicable box and enter the form number to which the in the instructions for their individual income tax return. The tax you owe relates. Enter the tax year, if the tax you owe is estimated burden for all other taxpayers who file this form is figured on a calendar year; if the tax you owe is figured on a fiscal shown below. year, enter the ending month, day, and year. Recordkeeping 3 hr., 35 min. Learning about the Part II law or the form 55 min. Reason for extension. In order for your application to be Preparing and sending considered, you must provide a detailed explanation of the undue the form to the IRS 3 hr., 25 min. hardship that will result if you pay the tax on or before the due If you have comments concerning the accuracy of these time date. An extension will not be granted if you provide only a estimates or suggestions for making this form simpler, we would general statement of hardship. be happy to hear from you. See the instructions for the tax return with which this form is filed. Part III Supporting documentation. You must attach: ● A statement(s) of your assets and liabilities, and ● An itemized list of your income and expenses for each of the 3 months prior to the due date of the tax. Note. Once your request has been reviewed, additional conditions may have to be met. Form 4868 Application for Automatic Extension of Time OMB No. 1545-0074 Department of the Treasury Internal Revenue Service (99) To File U.S. Individual Income Tax Return 2009 There are three ways to request an automatic extension of time E-file Using Your Personal Computer to file a U.S. individual income tax return. or Through a Tax Professional 1. You can file Form 4868 electronically by accessing IRS e-file using your home computer or by using a tax Refer to your tax software package or tax preparer for ways to professional who uses e-file. file electronically. Be sure to have a copy of your 2008 tax return—you will be asked to provide information from the return 2. You can pay all or part of your estimate of income tax due for taxpayer verification. If you wish to make a payment, you can using a credit or debit card. pay by electronic funds withdrawal or send your check or 3. You can file a paper Form 4868. money order to the address shown in the middle column under Where To File a Paper Form 4868. See page 4. The first two options are discussed under IRS e-file, next. Filing a paper Form 4868 is discussed later on this page. Pay by Credit or Debit Card It’s Convenient, Safe, and Secure You can get an extension if you pay part or all of your estimate of income tax due by using a credit or debit card. Your IRS e-file is the IRS’s electronic filing program. You can get an payment must be at least $1. You can pay by phone or over the automatic extension of time to file your tax return by filing Form Internet. See page 4. 4868 electronically. You will receive an electronic acknowledgment once you complete the transaction. Keep it with your records. Do not send in Form 4868 if you file File a Paper Form 4868 electronically, unless you are making a payment with a check or money order. (See page 4.) If you wish to file on paper instead of electronically, fill in the Complete Form 4868 to use as a worksheet. If you think you Form 4868 below and mail it to the address shown on page 4. may owe tax when you file your return, you will need to estimate For information on using a private delivery service, see page 4. your total tax liability and subtract how much you have already paid (lines 4, 5, and 6 below). Note. If you are a fiscal year taxpayer, you must file a paper Form 4868. You can apply for an extension by e-filing Form 4868 from a home computer or through a tax professional who uses e-file. Several companies offer free e-filing of Form 4868 through the Free File program. For more details, go to www.irs.gov and enter “Free File” in the search box at the top of the page. You can also apply for an extension by paying part or all of your estimate of income tax due by using a credit or debit card. See Pay by Credit or Debit Card later on this page. DETACH HERE Form 4868 Application for Automatic Extension of Time To File U.S. Individual Income Tax Return OMB No. 1545-0074 Department of the Treasury Internal Revenue Service (99) For calendar year 2009, or other tax year beginning , 2009, ending , 20 . 2009 Part I Identification Part II Individual Income Tax 1 Your name(s) (see instructions) 4 Estimate of total tax liability for 2009 . . $ 5 Total 2009 payments . . . . . . Address (see instructions) 6 Balance due. Subtract line 5 from line 4 (see instructions) . . . . . . . 7 Amount you are paying (see instructions) City, town, or post office State ZIP Code 8 Check here if you are “out of the country” and a U.S. citizen or resident (see instructions) . . . . . . 2 Your social security number 3 Spouse's social security number 9 Check here if you file Form 1040NR or 1040NR-EZ and did not receive wages as an employee subject to U.S. income tax withholding . . . . . . . . . . For Privacy Act and Paperwork Reduction Act Notice, see page 4. Cat. No. 13141W Form 4868 (2009) Form 4868 (2009) Page 2 General Instructions of those tests by the due date of your return, request an Purpose of Form extension to a date after you expect to qualify using Form 2350, Use Form 4868 to apply for 6 more months (4 if “out of the Application for Extension of Time To File U.S. Income Tax country” (defined later on this page) and a U.S. citizen or Return. resident) to file Form 1040, 1040A, 1040EZ, 1040NR, or You are out of the country if: 1040NR-EZ. • You live outside the United States and Puerto Rico and your Gift or generation-skipping transfer (GST) tax return (Form main place of work is outside the United States and Puerto 709). An extension of time to file your 2009 calendar year Rico, or income tax return also extends the time to file Form 709 for 2009. However, it does not extend the time to pay any gift or • You are in military or naval service outside the United States GST tax you may owe for 2009. To make a payment of gift or and Puerto Rico. GST tax, see Form 8892. If you do not pay the amount due by If you qualify as being out of the country, you will still be the regular due date for Form 709, you will owe interest and eligible for the extension even if you are physically present in the may also be charged penalties. If the donor died during 2009, United States or Puerto Rico on the regular due date of the see the instructions for Forms 709 and 8892. return. For more information on extensions for taxpayers out of the Qualifying for the Extension country, see Pub. 54, Tax Guide for U.S. Citizens and Resident To get the extra time you must: Aliens Abroad. 1. Properly estimate your 2009 tax liability using the Form 1040NR or 1040NR-EZ filers. If you cannot file your information available to you, return by the due date, you should file Form 4868. You must file 2. Enter your total tax liability on line 4 of Form 4868, and Form 4868 by the regular due date of the return. 3. File Form 4868 by the regular due date of your return. If you did not receive wages as an employee subject to U.S. income tax withholding, and your return is due June 15, 2010, Although you are not required to make a payment of the ! tax you estimate as due, Form 4868 does not extend check the box on line 9. CAUTION the time to pay taxes. If you do not pay the amount due Total Time Allowed by the regular due date, you will owe interest. You may also be Generally, we cannot extend the due date of your return for charged penalties. For more details, see Interest and Late more than 6 months (October 15, 2010, for most calendar year Payment Penalty on this page. Any remittance you make with taxpayers). However, there may be an exception if you are living your application for extension will be treated as a payment of out of the country. See Pub. 54 for more information. tax. You do not have to explain why you are asking for the Filing Your Tax Return extension. We will contact you only if your request is denied. You can file your tax return any time before the extension Do not file Form 4868 if you want the IRS to figure your tax or expires. you are under a court order to file your return by the regular due Do not attach a copy of Form 4868 to your return. date. Interest When To File Form 4868 You will owe interest on any tax not paid by the regular due date File Form 4868 by April 15, 2010. Fiscal year taxpayers, file of your return. This is April 15, 2010, for a 2009 calendar year Form 4868 by the regular due date of the return. return even if you qualify for the 2-month extension because you Taxpayers who are out of the country. If, on the regular due were out of the country. The interest runs until you pay the tax. date of your return, you are out of the country and a U.S. citizen Even if you had a good reason for not paying on time, you will or resident, you are allowed 2 extra months to file your return still owe interest. and pay any amount due without requesting an extension. For a Late Payment Penalty calendar year return, this is June 15, 2010. File this form and be sure to check the box on line 8 if you need an additional 4 The late payment penalty is usually ½ of 1% of any tax (other months to file your return. than estimated tax) not paid by the regular due date. It is If you are out of the country and a U.S. citizen or resident, you charged for each month or part of a month the tax is unpaid. may qualify for special tax treatment if you meet the foreign The maximum penalty is 25%. residence or presence tests. If you do not expect to meet either Form 4868 (2009) Page 3 The late payment penalty will not be charged if you can show How To Claim Credit for Payment Made With This Form reasonable cause for not paying on time. Attach a statement to When you file your 2009 return, include the amount of any your return fully explaining the reason. Do not attach the payment you made with Form 4868 on the appropriate line of statement to Form 4868. your tax return. You are considered to have reasonable cause for the period The instructions for the following line of your tax return will tell covered by this automatic extension if at least 90% of your you how to report the payment. actual 2009 tax liability is paid before the regular due date of your return through withholding, estimated tax payments, or • Form 1040, line 68. payments made with Form 4868. • Form 1040A, line 44. Late Filing Penalty • Form 1040EZ, line 10. • Form 1040NR, line 62. A late filing penalty is usually charged if your return is filed after the due date (including extensions). The penalty is usually 5% of • Form 1040NR-EZ, line 21. the amount due for each month or part of a month your return is If you and your spouse each filed a separate Form 4868 but late. The maximum penalty is 25%. If your return is more than later file a joint return for 2009, enter the total paid with both 60 days late, the minimum penalty is $135 or the balance of the Forms 4868 on the appropriate line of your joint return. tax due on your return, whichever is smaller. You might not owe If you and your spouse jointly file Form 4868 but later file the penalty if you have a reasonable explanation for filing late. separate returns for 2009, you can enter the total amount paid Attach a statement to your return fully explaining the reason. Do with Form 4868 on either of your separate returns. Or you and not attach the statement to Form 4868. your spouse can divide the payment in any agreed amounts. Be sure each separate return has the social security numbers of both spouses. Specific Instructions How To Complete Form 4868 Line 4—Estimate of Total Tax Liability for 2009 Part I—Identification Enter on line 4 the total tax liability you expect to report on your 2009: Enter your name(s) and address. If you plan to file a joint return, • Form 1040, line 60. include both spouses’ names in the order in which they will appear on the return. • Form 1040A, line 37. If you want correspondence regarding this extension to be • Form 1040EZ, line 11. sent to you at an address other than your own, enter that • Form 1040NR, line 57. address. If you want the correspondence sent to an agent • Form 1040NR-EZ, line 17. acting for you, include the agent’s name (as well as your own) If you expect this amount to be zero, enter -0-. and the agent’s address. Make your estimate as accurate as you can with the If you changed your name after you filed your last return because of marriage, divorce, etc., be sure to report this to the ! CAUTION information you have. If we later find that the estimate Social Security Administration before filing Form 4868. This was not reasonable, the extension will be null and void. prevents delays in processing your extension request. Line 5—Estimate of Total Payments for 2009 If you changed your mailing address after you filed your last Enter on line 5 the total payments you expect to report on your return, you should use Form 8822, Change of Address, to notify 2009: the IRS of the change. Showing a new address on Form 4868 will not update your record. You can get IRS forms by calling • Form 1040, line 71 (excluding line 68). 1-800-TAX-FORM (1-800-829-3676). You can also download • Form 1040A, line 44. forms from the IRS website at www.irs.gov. • Form 1040EZ, line 10. If you plan to file a joint return, enter on line 2 the social • Form 1040NR, line 66 (excluding line 62). security number (SSN) that you will show first on your return. • Form 1040NR-EZ, line 21. Enter on line 3 the other SSN to be shown on the joint return. For Forms 1040A, 1040EZ, and 1040NR-EZ, do not IRS individual taxpayer identification numbers (ITINs) for aliens. If you are a nonresident or resident alien and you do not ! CAUTION include on line 5 the amount you are paying with this have and are not eligible to get an SSN, you must apply for an Form 4868. ITIN. Although an ITIN is not required to file Form 4868, you will Line 6—Balance Due need one to file your income tax return. For details on how to Subtract line 5 from line 4. If line 5 is more than line 4, enter -0-. apply for an ITIN, see Form W-7 and its instructions. Allow 8 to 10 weeks for the IRS to notify you of your ITIN. If you already Line 7—Amount You Are Paying have an ITIN, enter it wherever your SSN is requested. If you If you find you cannot pay the amount shown on line 6, you can are applying for an ITIN on Form W-7, enter “ITIN TO BE still get the extension. But you should pay as much as you can REQUESTED” wherever your SSN is requested. to limit the amount of interest you will owe. Also, you may be An ITIN is for tax use only. It does not entitle you to charged the late payment penalty on the unpaid tax from the ! CAUTION social security benefits or change your employment or regular due date of your return. See Late Payment Penalty that immigration status under U.S. law. begins on page 2. Part II—Individual Income Tax Line 8—Out of the Country Rounding off to whole dollars. You can round off cents to If you are out of the country on the regular due date of your whole dollars on Form 4868. If you do round to whole dollars, return, check the box on line 8. “Out of the country” is defined you must round all amounts. To round, drop amounts under 50 on page 2. cents and increase amounts from 50 to 99 cents to the next Line 9—Form 1040NR or 1040NR-EZ Filers dollar. For example, $1.39 becomes $1 and $2.50 becomes $3. If you have to add two or more amounts to figure the amount to If you did not receive wages subject to U.S. income tax enter on a line, include cents when adding the amounts and withholding, and your return is due June 15, 2010, check the round off only the total. box on line 9. Form 4868 (2009) Page 4 How To Make a Payment With Your Application customer service number or visiting the provider’s website shown below. Do not add the convenience fee to your tax Pay by Electronic Funds Withdrawal payment. If you e-file using your personal computer or through a tax RBS WorldPay, Inc. Link2Gov Corporation professional, you can make a payment by authorizing an 1-888-9-PAY-TAX tm 1-888-PAY-1040 tm electronic funds withdrawal from your checking or savings (1-888-972-9829) (1-888-729-1040) account. Check with your financial institution to make sure that 1-877-517-4881 (Customer Service) 1-888-658-5465 (Customer Service) an electronic funds withdrawal is allowed and to get the correct www.payUSAtax.com www.PAY1040.com routing and account numbers. Official Payments Corporation If you owe tax and wish to have the money electronically 1-888-UPAY-TAX tm withdrawn from your account, you will be asked to make the (1-888-872-9829) following declaration: 1-877-754-4413 (Customer Service) I authorize the U.S. Treasury and its designated Financial Agent to initiate an www.officialpayments.com ACH electronic funds withdrawal (direct debit) entry to the financial institution account indicated in the tax preparation software for payment of my Federal taxes and the financial institution to debit the entry to this account. To revoke a Confirmation number. You will receive a confirmation number payment, I must contact the U.S. Treasury Financial Agent at 1-888-353-4537 when you pay by credit or debit card. Enter the confirmation no later than 2 business days prior to the payment (settlement) date. I also number below and keep for your records. authorize the financial institutions involved in the processing of the electronic payment of taxes to receive confidential information necessary to answer Enter confirmation number here inquiries and resolve issues related to the payment. Do not file a paper Form 4868. Note. This is your written copy of the electronic funds withdrawal authorization you made to have the amount you owe Pay by Check or Money Order withdrawn. Keep it for your records. • When paying by check or money order with Form 4868, use Do not file a paper Form 4868. the appropriate address in the middle column under Where To File a Paper Form 4868 below. Pay by Credit or Debit Card • Make your check or money order payable to the “United You can apply for an extension by paying part or all of your States Treasury.” Do not send cash. estimate of tax due by credit or debit card. To pay by credit or • Write your social security number, daytime phone number, debit card, call toll-free or visit the website of one of the service and “2009 Form 4868” on your check or money order. providers listed on this page and follow the instructions. Fees may vary among the providers. You will be told what the fee is • Do not staple or attach your payment to Form 4868. during the transaction and you will have the option to either Note. If you e-file Form 4868 and mail a check or money order continue or cancel the transaction. You can also find out what to the IRS for payment, use a completed paper Form 4868 as a the fee will be by calling the provider’s toll-free automated voucher. And you are making a payment, send And you are not making a Where To File a Paper Form 4868 Form 4868 with your payment to payment, send Form 4868 to Internal Revenue Service: Department of the Treasury, If you live in: Internal Revenue Service Center: Florida, Georgia, North Carolina, South Carolina P.O. Box 105050 Atlanta, GA 30348-5050 Atlanta, GA 39901-0002 Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, P.O. Box 37009 Hartford, CT 06176-0009 Kansas City, MO 64999-0002 Vermont Alabama, Kentucky, Louisiana, Mississippi, Tennessee, Texas P.O. Box 1302 Charlotte, NC 28201-1302 Austin, TX 73301-0002 Alaska, Arizona, California, Colorado, Hawaii, Nevada, New Mexico, P.O. Box 7122 San Francisco, CA 94120-7122 Fresno, CA 93888-0002 Oregon, Utah, Washington Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Montana, P.O. Box 802503 Cincinnati, OH 45280-2503 Fresno, CA 93888-0002 Nebraska, North Dakota, Oklahoma, South Dakota, Wisconsin, Wyoming Arkansas, Connecticut, Delaware, District of Columbia, Maryland, Missouri, P.O. Box 970028 St. Louis, MO 63197-0028 Kansas City, MO 64999-0002 Ohio, Rhode Island, Virginia, West Virginia American Samoa or Puerto Rico (or exclude income under section 933); are a nonpermanent resident of Guam or the Virgin P.O. Box 1302 Charlotte, NC 28201-1302 Austin, TX 73301-0215 USA Islands*; have an APO or FPO or foreign address; are a nonresident alien or dual-status alien; or file Form 2555, 2555-EZ, or 4563. *Permanent residents of Guam should use: Department of Revenue and Taxation, Government of Guam, P.O. Box 23607, GMF, GU 96921; permanent residents of the Virgin Islands should use: V.I. Bureau of Internal Revenue, 9601 Estate Thomas, Charlotte Amalie, St. Thomas, VI 00802. Private Delivery Services apply for an automatic extension of time to file, you are required by Internal Revenue Code section 6081 to provide the information requested on this form. You can use certain private delivery services designated by the IRS to meet the Under section 6109, you must disclose your social security number or individual “timely mailing as timely filing/paying” rule for tax returns and payments. These taxpayer identification number. Routine uses of this information include giving it to private delivery services include only the following. the Department of Justice for civil and criminal litigation, and to cities, states, and • DHL Express (DHL): DHL Same Day Service. the District of Columbia for use in administering their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and state • Federal Express (FedEx): FedEx Priority Overnight, FedEx Standard Overnight, agencies to enforce federal nontax criminal laws, or to federal law enforcement FedEx 2 Day, FedEx International Priority, and FedEx International First. and intelligence agencies to combat terrorism. If you fail to provide this information • United Parcel Service (UPS): UPS Next Day Air, UPS Next Day Air Saver, UPS in a timely manner or provide incomplete or false information, you may be liable for 2nd Day Air, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS penalties and interest. Worldwide Express. You are not required to provide the information requested on a form that is The private delivery service can tell you how to get written proof of the mailing subject to the Paperwork Reduction Act unless the form displays a valid OMB date. control number. Books or records relating to a form or its instructions must be Private delivery services cannot deliver items to P.O. boxes. You must retained as long as their contents may become material in the administration of ! CAUTION use the U.S. Postal Service to mail any item to an IRS P.O. box address. any Internal Revenue law. Generally, tax returns and return information are confidential, as required by Internal Revenue Code section 6103. The average time and expenses required to complete and file this form will vary Privacy Act and Paperwork Reduction Act Notice. We ask for the information depending on individual circumstances. For the estimated averages, see the on this form to carry out the Internal Revenue laws of the United States. We need instructions for your income tax return. this information so that our records will reflect your intention to file your individual If you have suggestions for making this form simpler, we would be happy to hear income tax return within 6 months after the regular due date. If you choose to from you. See the instructions for your income tax return. Form 8857 (Rev. June 2007) Request for Innocent Spouse Relief OMB No. 1545-1596 Department of the Treasury Internal Revenue Service (99) Do not file with your tax return. See separate instructions. Important things you should know ● Answer all the questions on this form that apply, attach any necessary documentation, and sign on page 4. Do not delay filing this form because of missing documentation. See instructions. ● By law, the IRS must contact the person who was your spouse for the years you want relief. There are no exceptions, even for victims of spousal abuse or domestic violence. Your personal information (such as your current name, address, and employer) will be protected. However, if you petition the Tax Court, your personal information may be released. See instructions for details. ● If you need help, see How To Get Help in the instructions. Part I Should you file this form? You must complete this part for each tax year. Tax Year 1 Tax Year 2 Tax Year 3* 1 Enter each tax year you want relief. It is important to enter the correct year. For example, if the IRS used your 2006 income tax refund to pay a 2004 tax amount you jointly owed, enter tax year 2004, not tax year 2006 1 Caution. The IRS generally cannot collect the amount you owe until your request for each year is resolved. However, the time the IRS has to collect is extended. See Collection Statute of Limitations on page 3 of the instructions. 2 Check the box for each year you would like a refund if you qualify for relief. You may be required to provide proof of payment. See instructions 2 Yes No Yes No Yes No 3 Did the IRS use your share of the joint refund to pay any of the following past-due debts of your spouse: federal tax, state income tax, child support, spousal support, or federal non-tax debt such as a student loan? ● If “Yes,” stop here; do not file this form for that tax year. Instead, file Form 8379. See instructions. ● If “No,” go to line 4 3 4 Did you file a joint return for the tax year listed on line 1? ● If “Yes,” skip line 5 and go to line 6. ● If “No,” go to line 5 4 5 If you did not file a joint return for that tax year, were you a resident of Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin? ● If “Yes,” see Community Property Laws on page 2 of the instructions. ● If “No” on both lines 4 and 5, stop here. Do not file this form for that tax year 5 *If you want relief for more than 3 years, fill out an additional form. Part II Tell us about yourself 6 Your current name (see instructions) Your social security number Your current home address (number and street). If a P.O. box, see instructions. Apt. no. County City, town or post office, state, and ZIP code. If a foreign address, see instructions. Best daytime phone number ( ) Part III Tell us about you and your spouse for the tax years you want relief 7 Who was your spouse for the tax years you want relief? File a separate Form 8857 for tax years involving different spouses or former spouses. That person’s current name Social security number (if known) Current home address (number and street) (if known). If a P.O. box, see instructions. Apt. no. City, town or post office, state, and ZIP code. If a foreign address, see instructions. Best daytime phone number ( ) For Privacy Act and Paperwork Reduction Act Notice, see instructions. Cat. No. 24647V Form 8857 (Rev. 6-2007) Form 8857 (Rev. 6-2007) Page 2 Note. If you need more room to write your answer for any question, attach more pages. Be sure to write your name and social security number on the top of all pages you attach. Part III (Continued) 8 What is the current marital status between you and the person on line 7? Married and still living together Married and living apart since / / MM DD YYYY Widowed since / / Attach a photocopy of the death certificate and will (if one exists). MM DD YYYY Legally separated since / / Attach a photocopy of your entire separation agreement. MM DD YYYY Divorced since / / Attach a photocopy of your entire divorce decree. MM DD YYYY Note. A divorce decree stating that your former spouse must pay all taxes does not necessarily mean you qualify for relief. 9 What was the highest level of education you had completed when the return(s) were filed? If the answers are not the same for all tax years, explain. High school diploma, equivalent, or less Some college College degree or higher. List any degrees you have List any college-level business or tax-related courses you completed Explain 10 Were you a victim of spousal abuse or domestic violence during any of the tax years you want relief? If the answers are not the same for all tax years, explain. Yes. Attach a statement to explain the situation and when it started. Provide photocopies of any documentation, such as police reports, a restraining order, a doctor’s report or letter, or a notarized statement from someone who was aware of the situation. No. 11 Did you sign the return(s)? If the answers are not the same for all tax years, explain. Yes. If you were forced to sign under duress (threat of harm or other form of coercion), check here . See instructions. No. Your signature was forged. See instructions. 12 When any of the returns were signed, did you have a mental or physical health problem or do you have a mental or physical health problem now? If the answers are not the same for all tax years, explain. Yes. Attach a statement to explain the problem and when it started. Provide photocopies of any documentation, such as medical bills or a doctor’s report or letter. No. Part IV Tell us how you were involved with finances and preparing returns for those tax years 13 How were you involved with preparing the returns? Check all that apply and explain, if necessary. If the answers are not the same for all tax years, explain. You filled out or helped fill out the returns. You gathered receipts and cancelled checks. You gave tax documents (such as Forms W-2, 1099, etc.) to the person who prepared the returns. You reviewed the returns before they were signed. You did not review the returns before they were signed. Explain below. You were not involved in preparing the returns. Other Explain how you were involved Form 8857 (Rev. 6-2007) Form 8857 (Rev. 6-2007) Page 3 Note. If you need more room to write your answer for any question, attach more pages. Be sure to write your name and social security number on the top of all pages you attach. Part IV (Continued) 14 When the returns were signed, were you concerned that any of the returns were incorrect or missing information? Check all that apply and explain, if necessary. If the answers are not the same for all tax years, explain. You knew something was incorrect or missing, but you said nothing. You knew something was incorrect or missing and asked about it. You did not know anything was incorrect or missing. Explain 15 When any of the returns were signed, what did you know about the income of the person on line 7? If the answers are not the same for all tax years, explain. You knew that person had income. List each type of income on a separate line. (Examples are wages, social security, gambling winnings, or self-employment business income.) Enter each tax year and the amount of income for each type you listed. If you do not know any details, enter “I don’t know.” Tax Year 1 Tax Year 2 Tax Year 3 Type of income Who paid it to that person $ $ $ $ $ $ $ $ $ You knew that person was self-employed and you helped with the books and records. You knew that person was self-employed and you did not help with the books and records. You knew that person had no income. You did not know if that person had income. Explain 16 When the returns were signed, did you know any amount was owed to the IRS for those tax years? If the answers are not the same for all tax years, explain. Yes. Explain when and how you thought the amount of tax reported on the return would be paid No. Explain 17 When any of the returns were signed, were you having financial problems (for example, bankruptcy or bills you could not pay)? If the answers are not the same for all tax years, explain. Yes. Explain No. Did not know. Explain 18 For the years you want relief, how were you involved in the household finances? Check all that apply. If the answers are not the same for all tax years, explain. You knew the person on line 7 had separate accounts. You had joint accounts but you had limited use of them or did not use them. Explain below. You used joint accounts. You made deposits, paid bills, balanced the checkbook, or reviewed the monthly bank statements. You made decisions about how money was spent. For example, you paid bills or made decisions about household purchases. You were not involved in handling money for the household. Other Explain anything else you want to tell us about your household finances 19 Has the person on line 7 ever transferred assets (money or property) to you? (Property includes real estate, stocks, bonds, or other property to which you have title.) See instructions. Yes. List the assets and the dates they were transferred. Explain why the assets were transferred No. Form 8857 (Rev. 6-2007) Form 8857 (Rev. 6-2007) Page 4 Part V Tell us about your current financial situation 20 Tell us the number of people currently in your household. Adults Children 21 Tell us your current average monthly income and expenses for your entire household. If family or friends are helping to support you, include the amount of support as gifts under Monthly income. Under Monthly expenses, enter all expenses, including expenses paid with income from gifts. Monthly income Amount Monthly expenses Amount Federal, state, and local taxes deducted Gifts from your paycheck Wages (Gross pay) Rent or mortgage Pensions Utilities Unemployment Telephone Social security Government assistance, such as housing, Food food stamps, grants Car expenses, payments, insurance, etc. Alimony Medical expenses, including medical insurance Child support Life insurance Self-employment business income Clothing Rental income Child care Interest and dividends Public transportation Other income, such as disability Other expenses, such as real estate payments, gambling winnings, etc. taxes, child support, etc. List the type below: List the type below: Type Type Type Type Type Type Total Total 22 Please provide any other information you want us to consider in determining whether it would be unfair to hold you liable for the tax. If you need more room, attach more pages. Be sure to write your name and social security number on the top of all pages you attach. Caution By signing this form, you understand that, by law, we must contact the person on line 7. See instructions for details. Sign Under penalties of perjury, I declare that I have examined this form and any accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based Here on all information of which preparer has any knowledge. Your signature Date Keep a copy for your records. Date Preparer’s SSN or PTIN Preparer’s Paid signature Check if self-employed Preparer’s Firm’s name (or yours EIN Use Only if self-employed), code address, and ZIP Phone no. ( ) Form 8857 (Rev. 6-2007) Collection Appeal Request 1. Taxpayer’s Name 2. Representative: (Form 2848, Power of Attorney Attached) 3. SSN/EIN 4. Taxpayer’s Business Phone 5. Taxpayer’s Home Phone 6. Representative’s Phone 7. Taxpayer’s Street Address 8. City 9. State 10. Zip Code 11. Type of Tax (Tax Form) 12. Tax Periods Being Appealed 13. Tax Due Collection Action(s) Appealed 14. Please Check the Collection Action(s) You’re Appealing: Federal Tax Lien Denial of Installment Agreement Levy or Notice of Levy Termination of Installment Agreement Seizure Explanation 15. Please explain why you disagree with the collection action(s) you checked above and explain how you would resolve your tax problem. Attach additional pages if needed. Attach copies of any documents that you think will support your position. Under penalties of perjury, I declare that I have examined this request and the attached documents, and to the best of my knowledge and belief, they are true, correct and complete. A submission by a representative, other than the taxpayer, is based on all information of which preparer has any knowledge. 16. Taxpayer’s or Authorized Representative’s Signature 17. Date 18. Collection Manager’s Signature 19. Date Received Form 9423 (Rev. 01-1999) Catalog Number 14169I Department of the Treasury – Internal Revenue Service (Over) Collection Appeal Rights FOR LIENS, LEVIES, SEIZURES, AND DENIAL OR TERMINATION OF INSTALLMENT AGREEMENT You may appeal a Notice of Federal Tax Lien, levy, seizure, or denial or termination of an installment agreement under these procedures. However, if you request an appeal after IRS makes a seizure, you must appeal to the Collection manager within 10 business days after the Notice of Seizure is provided to you or left at your home or business. How to Appeal If You Disagree With One of These Actions 1. If you disagree with the decision of the Revenue Officer, and wish to appeal, you must first request a conference with a Collection manager. 2. If you do not resolve your disagreement with the Collection manager, you may request Appeals consideration by completing Form 9423, Collection Appeal Request. 3. On the Form 9423, check the Collection action(s) you disagree with and explain why you disagree. You must also explain your solution to resolve your tax problem. THE COLLECTION OFFICE MUST RECEIVE YOUR REQUEST FOR AN APPEAL WITHIN 2 DAYS OF YOUR CONFERENCE WITH THE COLLECTION MANAGER OR WE WILL RESUME COLLECTION ACTION. What will happen when you appeal your case Normally, we will stop the collection action(s) you disagree with until your appeal is settled, unless we have reason to believe that collection of the amount owed is at risk. You may have a representative You may represent yourself at your Appeals conference or you may be represented by an attorney, certified public accountant, or a person enrolled to practice before the IRS. If you want your representative to appear without you, you must provide a properly completed Form 2848, Power of Attorney and Declaration of Representative. You can obtain Form 2848 from your local IRS office or by calling 1-800-829-3676. Decision on the appeal Once the Appeals Officer makes a decision on your case, that decision is binding on both you and the IRS. This means that both you and the IRS are required to accept the decision and live up to its terms. Note: Providing false information, failing to provide all pertinent information, or fraud will void Appeal’s decision.
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