Form 433-B of Book 656: Offer In Compromise

Booklet 656 form 433b is necessary for those business owners that have businesses that are any other entity than sole proprietorships. This form is used to calculate the minimum offer you can make the IRS when pursuing an offer in compromise, unless you are able to provide evidence otherwise.

Section 1: This section requests basic information, such as your EIN, the identity of partners, officers, and LLC members.

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: In section 3 you are to provide information regarding your business income, such as average gross monthly income (supported by documentation).

Section Four is where you will relay the specifics of business expenses. This would be details such as, your average gross monthly expenses of the most recent period 6 — 12 months (all documented). Now, if you will provide a profit and loss report for the period, you can give an average amount here.

Calculating the offer

If you plan to pay off the offer amount within a period of 5 months, follow the formula below to calculate.

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

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

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

decide on, your minimum contribution amount must exceed zero.

The sixth section

In section 6, you can expect to give information like whether or not your business has filed bankruptcy before, and whether or not your company has whatever other affiliations that may owe money to your company. In this section, you will also be asked to share details on whether you’ve unloaded assets at a discount in the past ten years.

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