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Offer in Compromise (OIC) Disagreed Items

In preparing a request for an appeal, compile a list of specific items you do not agree with and a statement explaining why you disagree with each item. You may find a review of the following beneficial:

Check your figures and calculations again and verify the documents you submitted to Collection. If you do not have your completed Form 433-A available, refer to a blank Form 433-A.

  • The Monthly Income/Expense Statement (see Section 4, Page 4) requires you to provide the following:
    • Proof (i.e. pay stubs and earnings statements) of gross earnings and deductions for the past three months from each of your employers;
    • Proof of pension, social security and/or other income for the past three months;
    • A current statement from the lender on your automobile with the monthly payment and balance due;
    • A current statement from the lien holder on your residence with the monthly payment and balance due;
    • A copy of your last Form 1040 with all schedules, and
    • Proof of current expenses paid for the past three months including utilities, rent, insurance, property tax, non-business transportation expense (i.e. car payments, lease payments, fiel, oil, insurance, registration, parking), healthcare (including insurance premiums co-payments, other out-of-pocket expenses) and court-ordered payments.

Note: The amounts used on the “Monthly Income/Expense Statement” of Form 433-A could be different than the amounts used on the IET worksheet for food, clothing, miscellaneous, transportation, housing and utilities, out-of-pocket healthcare and other expenses. Collection Financial Standards are used to help determine a taxpayer’s ability to pay a tax debt. All standards, except miscellaneous, are derived from the Bureau of Labor Statistics (BLS) Consumer Expenditure Survey (CES). These financial standards are explained below:

  • Did you compute the amounts in accordance with instructions?

Review the instructions in the following sections on Form 433-A:

  • Section 4, Items 11-13: Cash on Hand, Personal Bank Accounts and Investments
  • Section 4, Items 14-15: Available Credit and Life Insurance
  • Section 4, Items 17-19: Personal Asset and Liability
  • Section 5: Self-Employed

Note: Certain assets such as vehicles, and real estate should be valued at the quick sale value. This is the amount you can sell the asset today. You may compute the value of a vehicle by consulting a trade association guide for the fair market value (FMV) and discounting the value by 20%. You may compute the value of real estate by an appraisal, the replacement cost value on your residence and possibly the taxable value of your home.

  • Did you provide the required attachments?

See the bottom of page 4 of Form 433-A for “Attachments Required for Wage Earners and Serf-Employed Individuals.”

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Tax, Accounting, Consulting - Emil Estafanous, CPA, CFF, CGMA