IRS Self Help


IRS Self Help

The IRS Self Help is a resource for you and your business. Click to view and download the list of resources and links below:

Download Files Links and Sources
Click to download the IBO Bookkeeping 101 Guide Joe DePetris, CPA Web Site
  Click to View the IBOAI web site


The IRS website (www.irs.gov) is loaded with helpful information. You can get all IRS forms and publications here.

Helpful IRS telephone numbers:

Information, questions, etc. – 1.800.829.1040
Refund Tracking – 1.800.829.1954
Automated Collections – 1.800.829.8374



Please read on for information regarding offer-in-compromise or IRS payment plans.

  • Subtract these from your monthly income and this is your “ability to make monthly payments.”

  • You then multiply this times 48 or 60, or whatever the case may be.

  • You must add all equities in any assets you own (fair market minus and debt) to the above number to get your estimated offer amount.

  • The term “equities” as referred to the above include home or rental property equities, the value of investments and retirement plans, autos, boats, motor coaches, etc.

  • IRS will typically discount real estate and autos, etc. by 20% before adding these amounts to your proposed settlement.

  • Retirement plan equities are reduced by the amount of tax and penalties you would owe if they were distributed to you.

  • IRS will research your equity estimates especially for real estate, autos, etc.

  • After completing this exercise you should have a reasonable estimate of what any acceptable amount might be for you.

  • Always ask for a quick estimate based on the above before agreeing to hire anyone. Review each calculation carefully.

  • You can Google® “national collection standards” to get the IRS allowances mentioned above.

  • If the company doesn’t want to show you how they come up with their estimate for you do not hire them.

  • You may access Forms 656 (OIC application form) and Forms 433A and 433B (financial information forms) on the IRS website. Be sure to print off and carefully read the instructions.

  • An application fee of $150 and 20% of the amount offered to settle your tax bill are due at the time of filing.

  • If you meet the low-income test standards, you might be able to get the $150 application fee waived.

  • If you elect the monthly payment plan rather than the cash settlement plan, you must make the proposed monthly payment while your offer is in progress.

  • If you cannot do an OIC, you will need to go on a payment plan with the IRS.

  • The amount of your monthly payment to IRS under an installment agreement is typically your ability to make monthly payments and is calculated the same way it is for the OIC referenced above. If you owe $25,000 or less and can make a monthly payment based on dividing the amount you owe by 36, IRS will, in most cases, automatically grant your request.

  • If the above is more than you can pay monthly, you can negotiate using the IRS tables and your monthly income.

  • When you hear about IRS levies on paychecks or bank accounts, liens being filed, etc., it is probably because you, or someone you know, failed to respond to several notices.

  • PLEASE, DO NOT STICK YOUR HEAD IN THE SAND or hide in the closet. Things will only get worse.

  • Just call IRS at the number on your notice. In many cases you will be surprised at how easy it is to work out something.

  • If that doesn’t work, then get professional help.


The following is then subtracted from your monthly income to arrive at your “ability to pay.”

  1. A living standard (food, sundries, etc based on family size.
  2. A housing allowance, which includes utilities, mortgage payment, rent, etc. This allowance is based on geographic location and family size.
  3. Transportation costs including car payments, lease payments and operating costs.
  4. Healthcare costs including health care premiums paid by you, not your employer, and recurring monthly expenses such as medications.
  5. Income taxes – both state and federal as well as Social Security and Medicare taxes.
  6. Daycare, student loan payments, and court ordered payments such as child support or alimony.


  • Subtract these from your monthly income and this is your “ability to make monthly payments.”

  • You then multiply this times 48 or 60, or whatever the case may be.

  • You must add all equities in any assets you own (fair market minus and debt) to the above number to get your estimated offer amount.

  • The term “equities” as referred to the above include home or rental property equities, the value of investments and retirement plans, autos, boats, motor coaches, etc.

  • IRS will typically discount real estate and autos, etc. by 20% before adding these amounts to your proposed settlement.

  • Retirement plan equities are reduced by the amount of tax and penalties you would owe if they were distributed to you.

  • IRS will research your equity estimates especially for real estate, autos, etc.

  • After completing this exercise you should have a reasonable estimate of what any acceptable amount might be for you.

  • Always ask for a quick estimate based on the above before agreeing to hire anyone. Review each calculation carefully.

  • You can google “national collection standards” to get the IRS allowances mentioned above.
  • If the company doesn’t want to show you how they come up with their estimate for you do not hire them.

  • You may access Forms 656 (OIC application form) and Forms 433A and 433B (financial information forms) on the IRS website. Be sure to print off and carefully read the instructions.

  • An application fee of $150 and 20% of the amount offered to settle your tax bill are due at the time of filing.

  • If you meet the low-income test standards, you might be able to get the $150 application fee waived.

  • If you elect the monthly payment plan rather than the cash settlement plan, you must make the proposed monthly payment while your offer is in progress.

  • If you cannot do an OIC, you will need to go on a payment plan with the IRS.

  • The amount of your monthly payment to IRS under an installment agreement is typically your ability to make monthly payments and is calculated the same way it is for the OIC referenced above. If you owe $25,000 or less and can make a monthly payment based on dividing the amount you owe by 36, IRS will, in most cases, automatically grant your request.

  • If the above is more than you can pay monthly, you can negotiate using the IRS tables and your monthly income.

  • When you hear about IRS levies on paychecks or bank accounts, liens being filed, etc., it is probably because you, or someone you know, failed to respond to several notices.

  • PLEASE, DO NOT STICK YOUR HEAD IN THE SAND or hide in the closet. Things will only get worse.

  • Just call IRS at the number on your notice. In many cases you will be surprised at how easy it is to work out something.

  • If that doesn’t work, then get professional help.