CTRS CTRS Offer in Compromise 2

Question 1

Which IRS forms are required to submit a Doubt as to Collectibility OIC for an individual taxpayer?

Accepted Answer

Form 656 and Form 433-A (OIC)

Answer

An individual DATC OIC requires Form 656 (Offer in Compromise) and Form 433-A (OIC) (Collection Information Statement for Wage Earners and Self-Employed Individuals).

Question 2

What does the term 'dissipated assets' mean in the context of an OIC investigation?

Accepted Answer

Assets the taxpayer transferred or spent for less than fair market value, which the IRS may add back to RCP

Answer

Dissipated assets are those transferred away or consumed by the taxpayer below fair market value; the IRS adds their value back to RCP when evaluating an OIC.

Question 3

During the pendency of an OIC investigation, what happens to the Collection Statute Expiration Date (CSED)?

Accepted Answer

The CSED is tolled (suspended) for the period the OIC is pending plus 30 days

Answer

While an OIC is pending and for 30 days after its rejection, the CSED is tolled under IRC §6331(i), preserving the IRS's collection window.

Question 4

What is an Effective Tax Administration (ETA) OIC and when is it appropriate?

Accepted Answer

An OIC where the taxpayer can pay the full liability but collection would create economic hardship or be inequitable

Answer

An ETA offer is appropriate when the taxpayer has the ability to pay the full liability but doing so would either create economic hardship or be inequitable and not in the best interest of the government.

Question 5

What is the OIC 'Pre-Qualifier Tool' published by the IRS?

Accepted Answer

An online tool on the IRS website that helps determine if a taxpayer is likely to qualify for an OIC based on income, expenses, and assets

Answer

The IRS OIC Pre-Qualifier Tool is a free online resource that allows taxpayers and practitioners to input financial data and see whether an OIC is likely to be a viable option.

(CTRS) Certified Tax Resolution Specialist Practice Test

(CTRS) Certified Tax Resolution Specialist Practice Test

CTRS CTRS Offer in Compromise 2