Form 433-b Offer In Compromise Debt Relief

Booklet 656 form 433b is obligatory for those business owners that have businesses that are any other entity than sole proprietorships

. This form is used in calculating the minimum offer you can make the IRS when seeking an offer in compromise, that is unless you're able to provide evidence otherwise.

How to complete 656: Form 433b

Section 1: is where you'll provide an employer identification number, partners, officers, LLC members, major shareholders, and frequency of tax deposits.

Section 2: In section 2, you are to provide business asset information, including: bank accounts, investment accounts, and notes receivable. Also, here you'll provide information regarding vehicles, equipment, and real estate.

Section 3: This section requests your business income. The form requests your average gross monthly business income based on documentation from the most recent 6-12 months. Now, if you also provide a profit and loss report for this period, you can present an average amount of profit from these figures instead.

Section 4: is where you'll relay the details of business expenses. That is, your average gross monthly expenses of the more recent period 6 -- 12 months (all verified and supported). And, if you will provide a profit and loss report for the period, you can give an average amount here.

When calculating an offer. . .

After entering your businesss fiscal details, Form 433-B establishes your lowest offer amount. The 433b then allows two calculation formulas dependent upon whether it is your intention to pay the offer within five months or at a later point. If you elect to pay sooner rather than later, you are going to find your minimum offer as follows:

[ 48 x Business income in excess of expenses] Total available assets

If you decide to pay beyond a five month period, your minimum offer increases to the following amount:

[Business income in excess of expenses x 60] Total assets available

Section 6: you are going to give details for example whether or not your business has filed bankruptcy before, and whether your business has any other affiliations that may owe money to your business. In this section, you will also be requested to disclose information on whether you've unloaded any assets at a discount in these past ten years.

by: John C. Huddleston

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